S 945 IS
106th CONGRESS
1st Session
S. 945
To amend title 11, United States Code, and for other
purposes.
IN THE SENATE OF THE UNITED STATES
May 3, 1999
Mr. DURBIN (for himself, Mr. LEAHY, Mr. KENNEDY, Mr. FEINGOLD, and Mr.
SARBANES) introduced the following bill; which was read twice and referred to
the Committee on the Judiciary
A BILL
To amend title 11, United States Code, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE- This Act may be cited as the `Consumer Bankruptcy Reform
Act of 1999'.
(b) TABLE OF CONTENTS- The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--NEEDS-BASED BANKRUPTCY
Sec. 102. Dismissal or conversion.
TITLE II--ENHANCED PROCEDURAL PROTECTIONS FOR CONSUMERS
Sec. 201. Allowance of claims or interests.
Sec. 202. Exceptions to discharge.
Sec. 203. Effect of discharge.
Sec. 204. Automatic stay.
Sec. 206. Discouraging predatory lending practices.
Sec. 207. Enhanced disclosure for credit extensions secured by
dwelling.
Sec. 208. Dual-use debit card.
Sec. 209. Enhanced disclosures under an open end credit plan.
Sec. 210. Violations of the automatic stay.
Sec. 211. Discouraging abusive reaffirmation practices.
Sec. 212. Sense of Congress regarding the homestead exemption.
Sec. 213. Encouraging creditworthiness.
Sec. 214. Treasury Department study regarding security interests under
an open end credit plan.
TITLE III--IMPROVED PROCEDURES FOR EFFICIENT ADMINISTRATION OF THE
BANKRUPTCY SYSTEM
Sec. 301. Notice of alternatives.
Sec. 302. Fair treatment of secured creditors under chapter 13.
Sec. 303. Discouragement of bad faith repeat filings.
Sec. 304. Timely filing and confirmation of plans under chapter
13.
Sec. 305. Application of the codebtor stay only when the stay protects
the debtor.
Sec. 306. Improved bankruptcy statistics.
Sec. 307. Audit procedures.
Sec. 308. Creditor representation at first meeting of creditors.
Sec. 309. Fair notice for creditors in chapter 7 and 13 cases.
Sec. 310. Stopping abusive conversions from chapter 13.
Sec. 311. Prompt relief from stay in individual cases.
Sec. 312. Dismissal for failure to timely file schedules or provide
required information.
Sec. 313. Adequate time for preparation for a hearing on confirmation of
the plan.
Sec. 314. Discharge under chapter 13.
Sec. 315. Nondischargeable debts.
Sec. 316. Credit extensions on the eve of bankruptcy presumed
nondischargeable.
Sec. 317. Definition of household goods and antiques.
Sec. 318. Relief from stay when the debtor does not complete intended
surrender of consumer debt collateral.
Sec. 319. Adequate protection of lessors and purchase money secured
creditors.
Sec. 321. Miscellaneous improvements.
Sec. 322. Bankruptcy judgeships.
Sec. 323. Definition of domestic support obligation.
Sec. 324. Priorities for claims for domestic support obligations.
Sec. 325. Requirements to obtain confirmation and discharge in cases
involving domestic support obligations.
Sec. 326. Exceptions to automatic stay in domestic support obligation
proceedings.
Sec. 327. Nondischargeability of certain debts for alimony, maintenance,
and support.
Sec. 328. Continued liability of property.
Sec. 329. Protection of domestic support claims against preferential
transfer motions.
Sec. 330. Protection of retirement savings in bankruptcy.
Sec. 331. Additional amendments to title 11, United States Code.
Sec. 332. Debt limit increase.
Sec. 333. Elimination of requirement that family farmer and spouse
receive over 50 percent of income from farming operation in year prior to
bankruptcy.
Sec. 334. Prohibition of retroactive assessment of disposable
income.
Sec. 335. Amendment to section 1325 of title 11, United States
Code.
Sec. 336. Protection of savings earmarked for the postsecondary
education of children.
TITLE IV--FINANCIAL INSTRUMENTS
Sec. 401. Bankruptcy Code amendments.
Sec. 402. Damage measure.
Sec. 403. Asset-backed securitizations.
Sec. 404. Prohibition on certain actions for failure to incur finance
charges.
Sec. 405. Fees arising from certain ownership interests.
Sec. 406. Bankruptcy fees.
TITLE V--ANCILLARY AND OTHER CROSS-BORDER CASES
Sec. 501. Amendment to add chapter 6 to title 11, United States
Code.
Sec. 502. Amendments to other chapters in title 11, United States
Code.
TITLE VI--MISCELLANEOUS
Sec. 601. Executory contracts and unexpired leases.
Sec. 602. Expedited appeals of bankruptcy cases to courts of
appeals.
Sec. 603. Creditors and equity security holders committees.
Sec. 604. Repeal of sunset provision.
Sec. 605. Cases ancillary to foreign proceedings.
Sec. 607. Amendment to section 546 of title 11, United States
Code.
Sec. 608. Amendment to section 330(a) of title 11, United States
Code.
TITLE VII--TECHNICAL CORRECTIONS
Sec. 701. Adjustment of dollar amounts.
Sec. 702. Extension of time.
Sec. 703. Who may be a debtor.
Sec. 704. Penalty for persons who negligently or fraudulently prepare
bankruptcy petitions.
Sec. 705. Limitation on compensation of professional persons.
Sec. 706. Special tax provisions.
Sec. 707. Effect of conversion.
Sec. 708. Automatic stay.
Sec. 709. Allowance of administrative expenses.
Sec. 712. Exceptions to discharge.
Sec. 713. Effect of discharge.
Sec. 714. Protection against discriminatory treatment.
Sec. 715. Property of the estate.
Sec. 717. Postpetition transactions.
Sec. 718. Technical amendment.
Sec. 719. Disposition of property of the estate.
Sec. 720. General provisions.
Sec. 721. Appointment of elected trustee.
Sec. 722. Abandonment of railroad line.
Sec. 723. Contents of plan.
Sec. 724. Discharge under chapter 12.
Sec. 726. Bankruptcy cases and proceedings.
Sec. 727. Knowing disregard of bankruptcy law or rule.
Sec. 728. Rolling stock equipment.
Sec. 729. Curbing abusive filings.
Sec. 730. Study of operation of title 11 of the United States Code with
respect to small businesses.
Sec. 731. Transfers made by nonprofit charitable corporations.
Sec. 732. Effective date; application of amendments.
TITLE I--NEEDS-BASED BANKRUPTCY
SEC. 101. CONVERSION.
Section 706(c) of title 11, United States Code, is amended by inserting
`or consents to' after `requests'.
SEC. 102. DISMISSAL OR CONVERSION.
(a) IN GENERAL- Section 707 of title 11, United States Code, is
amended--
(1) by striking the section heading and inserting the following:
`Sec. 707. Dismissal of a case or conversion to a case under chapter
13';
(A) by inserting `(1)' after `(b)';
(B) in paragraph (1), as redesignated by subparagraph (A) of this
paragraph--
(i) in the first sentence--
(I) by striking `but not' and inserting `or';
(II) by inserting `, or, with the debtor's consent, convert such a
case to a case under chapter 13,' after `consumer debts';
and
(III) by striking `substantial abuse' and inserting `abuse';
and
(ii) by striking `There shall be a presumption in favor of granting
the relief requested by the debtor.'; and
(C) by adding at the end the following:
`(2) In considering under paragraph (1) whether the granting of relief
would be an abuse of the provisions of this chapter, the court shall consider
whether--
`(A) under section 1325(b)(1), on the basis of the current income of the
debtor, the debtor could pay an amount greater than or equal to 30 percent
of unsecured claims that are not considered to be priority claims (as
determined under subchapter I of chapter 5); or
`(B) the debtor filed a petition for the relief in bad faith.
`(3)(A) If a panel trustee appointed under section 586(a)(1) of title 28
brings a motion for dismissal or conversion under this subsection and the
court grants that motion and finds that the action of the counsel for the
debtor in filing under this chapter was not substantially justified, the court
shall order the counsel for the debtor to reimburse the trustee for all
reasonable costs in prosecuting the motion, including reasonable attorneys'
fees.
`(B) If the court finds that the attorney for the debtor violated Rule
9011, at a minimum, the court shall order--
`(i) the assessment of an appropriate civil penalty against the counsel
for the debtor; and
`(ii) the payment of the civil penalty to the panel trustee or the
United States trustee.
`(C) In the case of a petition referred to in subparagraph (B), the
signature of an attorney shall constitute a certificate that the attorney
has--
`(i) performed a reasonable investigation into the circumstances that
gave rise to the petition; and
`(ii) determined that the petition--
`(I) is well grounded in fact; and
`(II) is warranted by existing law or a good faith argument for the
extension, modification, or reversal of existing law and does not
constitute an abuse under paragraph (1).
`(4)(A) Except as provided in subparagraph (B) and paragraph (5), the
court may award a debtor all reasonable costs in contesting a motion brought
by a party in interest (other than a panel trustee or United States trustee)
under this subsection (including reasonable attorneys' fees) if--
`(i) the court does not grant the motion; and
`(ii) the court finds that--
`(I) the position of the party that brought the motion was not
substantially justified; or
`(II) the party brought the motion solely for the purpose of coercing
a debtor into waiving a right guaranteed to the debtor under this
title.
`(B) A party in interest that has a claim of an aggregate amount less than
$1,000 shall not be subject to subparagraph (A).
`(5)(A) Only the judge, United States trustee, bankruptcy administrator,
or panel trustee may bring a motion under this subsection if the debtor and
the debtor's spouse combined, as of the date of the order for relief, have
current monthly total income equal to or less than the national median
household monthly income calculated on a monthly basis for a household of
equal size.
`(B) For purposes of subparagraph (A), for a household of more than 4
individuals, the median monthly income for that household shall be--
`(1) the median monthly income of a household of 4 individuals;
plus
`(2) $583 for each additional member of that household.'.
(b) CLERICAL AMENDMENT- The table of sections for chapter 7 of title 11,
United States Code, is amended by striking the item relating to section 707
and inserting the following:
`707. Dismissal of a case or conversion to a case under chapter
13.'.
TITLE II--ENHANCED PROCEDURAL PROTECTIONS FOR CONSUMERS
SEC. 201. ALLOWANCE OF CLAIMS OR INTERESTS.
Section 502 of title 11, United States Code, is amended by adding at the
end the following:
`(k)(1) The court may award the debtor reasonable attorneys' fees and
costs if, after an objection is filed by a debtor, the court--
`(A)(i) disallows the claim; or
`(ii) reduces the claim by an amount greater than 20 percent of the
amount of the initial claim filed by a party in interest; and
`(B) finds the position of the party filing the claim is not
substantially justified.
`(2) If the court finds that the position of a claimant under this section
is not substantially justified, the court may, in addition to awarding a
debtor reasonable attorneys' fees and costs under paragraph (1), award such
damages as may be required by the equities of the case.'.
SEC. 202. EXCEPTIONS TO DISCHARGE.
Section 523 of title 11, United States Code, is amended--
(1) in subsection (a)(2)(A), by striking `a false representation' and
inserting `a material false representation upon which the defrauded person
justifiably relied'; and
(2) by striking subsection (d) and inserting the following:
`(d)(1) Subject to paragraph (3), if a creditor requests a determination
of dischargeability of a consumer debt under this section and that debt is
discharged, the court shall award the debtor reasonable attorneys' fees and
costs.
`(2) In addition to making an award to a debtor under paragraph (1), if
the court finds that the position of a creditor in a proceeding covered under
this section is not substantially justified, the court may award reasonable
attorneys' fees and costs under paragraph (1) and such damages as may be
required by the equities of the case.
`(3)(A) A creditor may not request a determination of dischargeability of
a consumer debt under subsection (a)(2) if--
`(i) before the filing of the petition, the debtor made a good faith
effort to negotiate a reasonable alternative repayment schedule (including
making an offer of a reasonable alternative repayment schedule); and
`(ii) that creditor refused to negotiate an alternative payment
schedule, and that refusal was not reasonable.
`(B) For purposes of this paragraph, the debtor shall have the burden of
proof of establishing that--
`(i) an offer made by that debtor under subparagraph (A)(i) was
reasonable; and
`(ii) the refusal to negotiate by the creditor involved to was not
reasonable.'.
SEC. 203. EFFECT OF DISCHARGE.
Section 524 of title 11, United States Code, is amended by adding at the
end the following:
`(i) The willful failure of a creditor to credit payments received under a
plan confirmed under this title (including a plan of reorganization confirmed
under chapter 11) in the manner required by the plan (including crediting the
amounts required under the plan) shall constitute a violation of an injunction
under subsection (a)(2).
`(j) An individual who is injured by the failure of a creditor to comply
with the requirements for a reaffirmation agreement under subsections (c) and
(d), or by any willful violation of the injunction under subsection (a)(2),
shall be entitled to recover--
`(A)(i) the amount of actual damages; multiplied by
`(2) costs and attorneys' fees.'.
SEC. 204. AUTOMATIC STAY.
Section 362(h) of title 11, United States Code, is amended to read as
follows:
`(h)(1) An individual who is injured by any willful violation of a stay
provided in this section shall be entitled to recover--
`(B) reasonable costs, including attorneys' fees.
`(2) In addition to recovering actual damages, costs, and attorneys' fees
under paragraph (1), an individual described in paragraph (1) may recover
punitive damages in appropriate circumstances.'.
SEC. 205. DISCHARGE.
Section 727 of title 11, United States Code, is amended--
(1) in subsection (c), by adding at the end the following:
`(3)(A) A creditor may not request a determination of dischargeability of
a consumer debt under subsection (a) if--
`(i) before the filing of the petition, the debtor made a good faith
effort to negotiate a reasonable alternative repayment schedule (including
making an offer of a reasonable alternative repayment schedule); and
`(ii) that creditor refused to negotiate an alternative payment
schedule, and that refusal was not reasonable.
`(B) For purposes of this paragraph, the debtor shall have the burden of
proof of establishing that--
`(i) an offer made by that debtor under subparagraph (A)(i) was
reasonable; and
`(ii) the refusal to negotiate by the creditor involved to was not
reasonable.'; and
(2) by adding at the end the following:
`(f)(1) The court may award the debtor reasonable attorneys' fees and
costs in any case in which a creditor files a motion to deny relief to a
debtor under this section and that motion--
`(B) is withdrawn after the debtor has replied.
`(2) If the court finds that the position of a party filing a motion under
this section is not substantially justified, the court may assess against the
creditor such damages as may be required by the equities of the case.'.
SEC. 206. DISCOURAGING PREDATORY LENDING PRACTICES.
Section 502(b) of title 11, United States Code, is amended--
(1) in paragraph (8), by striking `or' at the end;
(2) in paragraph (9), by striking the period at the end and inserting `;
or'; and
(3) by adding at the end the following:
`(10) the claim is based on a secured debt if the creditor has failed to
comply with the requirements of subsection (a), (b), (c), (d), (e), (f),
(g), (h), or (i) of section 129 of the Truth in Lending Act (15 U.S.C.
1639).'.
SEC. 207. ENHANCED DISCLOSURE FOR CREDIT EXTENSIONS SECURED BY
DWELLING.
(a) OPEN-END CREDIT EXTENSIONS-
(1) CREDIT APPLICATIONS- Section 127A(a)(13) of the Truth in Lending Act
(15 U.S.C. 1637a(a)(13)) is amended--
(A) by striking `CONSULTATION OF TAX ADVISOR- A statement that the'
and inserting the following: `TAX DEDUCTIBILITY- A statement
that--
(B) by striking the period at the end and inserting the following: `;
and
`(B) in any case in which the extension of credit exceeds the fair
market value of the dwelling, the interest on the portion of the credit
extension that is greater than the fair market value of the dwelling is
not tax deductible for Federal income tax purposes.'.
(2) CREDIT ADVERTISEMENTS- Section 147(b) of the Truth in Lending Act
(15 U.S.C. 1665b(b)) is amended--
(A) by striking `If any' and inserting the following:
`(1) IN GENERAL- If any'; and
(B) by adding at the end the following:
`(2) CREDIT IN EXCESS OF FAIR MARKET VALUE- Each advertisement described
in subsection (a) that relates to an extension of credit that may exceed the
fair market value of the dwelling shall include a clear and conspicuous
statement that--
`(A) the interest on the portion of the credit extension that is
greater than the fair market value of the dwelling is not tax deductible
for Federal income tax purposes; and
`(B) the consumer may want to consult a tax advisor for further
information regarding the deductibility of interest and
charges.'.
(b) NON-OPEN END CREDIT EXTENSIONS-
(1) CREDIT APPLICATIONS- Section 128 of the Truth in Lending Act (15
U.S.C. 1638) is amended--
(A) in subsection (a), by adding at the end the following:
`(15) In the case of a consumer credit transaction that is secured by
the principal dwelling of the consumer, in which the extension of credit may
exceed the fair market value of the dwelling, a clear and conspicuous
statement that--
`(A) the interest on the portion of the credit extension that is
greater than the fair market value of the dwelling is not tax deductible
for Federal income tax purposes; and
`(B) the consumer should consult a tax advisor for further information
regarding the deductibility of interest and charges.'; and
(B) in subsection (b), by adding at the end the following:
`(3) In the case of a credit transaction described in paragraph (15) of
subsection (a), disclosures required by that paragraph shall be made to the
consumer at the time of application for such extension of credit.'.
(2) CREDIT ADVERTISEMENTS- Section 144 of the Truth in Lending Act (15
U.S.C. 1664) is amended by adding at the end the following:
`(e) Each advertisement to which this section applies that relates to a
consumer credit transaction that is secured by the principal dwelling of a
consumer in which the extension of credit may exceed the fair market value of
the dwelling shall clearly and conspicuously state that--
`(1) the interest on the portion of the credit extension that is greater
than the fair market value of the dwelling is not tax deductible for Federal
income tax purposes; and
`(2) the consumer may want to consult a tax advisor for further
information regarding the deductibility of interest and charges.'.
(c) EFFECTIVE DATE- This section and the amendments made by this section
shall take effect 1 year after the date of enactment of this Act.
SEC. 208. DUAL-USE DEBIT CARD.
(1) IN GENERAL- Section 909 of the Electronic Fund Transfer Act (15
U.S.C. 1693g) is amended--
(A) by redesignating subsections (b) through (e) as subsections (d)
through (g), respectively;
(i) by redesignating paragraphs (1) and (2) as subparagraphs (A) and
(B), respectively, and indenting appropriately;
(ii) by inserting `CARDS NECESSITATING UNIQUE
IDENTIFIER-
`(1) IN GENERAL- ' after `(a)';
(iii) by striking `other means of access can be identified as the
person authorized to use it, such as by signature, photograph,' and
inserting `other means of access can be identified as the person
authorized to use it by a unique identifier, such as a photograph,
retina scan,'; and
(iv) by striking `Notwithstanding the foregoing,' and inserting the
following:
`(2) NOTIFICATION- Notwithstanding paragraph (1),'; and
(C) by inserting after subsection (a) the following new
subsections:
`(b) CARDS NOT NECESSITATING UNIQUE IDENTIFIER- A consumer shall be liable
for an unauthorized electronic fund transfer only if--
`(1) the liability is not in excess of $50;
`(2) the unauthorized electronic fund transfer is initiated by the use
of a card that has been properly issued to a consumer other than the person
making the unauthorized transfer as a means of access to the account of that
consumer for the purpose of initiating an electronic fund transfer;
`(3) the unauthorized electronic fund transfer occurs before the card
issuer has been notified that an unauthorized use of the card has occurred
or may occur as the result of loss, theft, or otherwise; and
`(4) such unauthorized electronic fund transfer did not require the use
of a code or other unique identifier (other than a signature), such as a
photograph, fingerprint, or retina scan.
`(c) NOTICE OF LIABILITY AND RESPONSIBILITY TO REPORT LOSS OF CARD, CODE,
OR OTHER MEANS OF ACCESS- No consumer shall be liable under this title for any
unauthorized electronic fund transfer unless the consumer has received in a
timely manner the notice required under section 905(a)(1), and any subsequent
notice required under section 905(b) with regard to any change in the
information which is the subject of the notice required under section
905(a)(1).'.
(2) CONFORMING AMENDMENT- Section 905(a)(1) of the Electronic Fund
Transfer Act (15 U.S.C. 1693c(a)(1)) is amended to read as follows:
`(1) the liability of the consumer for any unauthorized electronic fund
transfer and the requirement for promptly reporting any loss, theft, or
unauthorized use of a card, code, or other means of access in order to limit
the liability of the consumer for any such unauthorized transfer;'.
(b) VALIDATION REQUIREMENT FOR DUAL-USE DEBIT CARDS-
(1) IN GENERAL- Section 911 of the Electronic Fund Transfer Act (15
U.S.C. 1693i) is amended--
(A) by redesignating subsection (c) as subsection (d); and
(B) by inserting after subsection (b) the following new
subsection:
`(c) VALIDATION REQUIREMENT- No person may issue a card described in
subsection (a), the use of which to initiate an electronic fund transfer does
not require the use of a code or other unique identifier other than a
signature (such as a fingerprint or retina scan), unless--
`(1) the requirements of paragraphs (1) through (4) of subsection (b)
are met; and
`(2) the issuer has provided to the consumer a clear and conspicuous
disclosure that use of the card may not require the use of such code or
other unique identifier.'.
(2) TECHNICAL AND CONFORMING AMENDMENT- Section 911(d) of the Electronic
Fund Transfer Act (15 U.S.C. 1993i(d)) (as redesignated by subsection (a)(1)
of this section) is amended by striking `For the purpose of subsection (b)'
and inserting `For purposes of subsections (b) and (c)'.
SEC. 209. ENHANCED DISCLOSURES UNDER AN OPEN END CREDIT PLAN.
(a) Amendments to the Truth in Lending Act-
(1) Enhanced disclosure of repayment terms-
(A) IN GENERAL- Section 127(b) of the Truth in Lending Act (15 U.S.C.
1637(b)) is amended by adding at the end the following:
`(11)(A) In a clear and conspicuous manner, repayment information that
would apply to the outstanding balance of the consumer under the credit
plan, including--
`(i) the required minimum monthly payment on that balance, represented
as both a dollar figure and a percentage of that balance;
`(ii) the number of months (rounded to the nearest month) that it
would take to pay the entire amount of that current balance if the
consumer pays only the required minimum monthly payments and if no further
advances are made;
`(iii) the total cost to the consumer, including interest and
principal payments, of paying that balance in full if the consumer pays
only the required minimum monthly payments and if no further advances are
made; and
`(iv) the following statement: `If your current rate is a temporary
introductory rate, your total costs may be higher.'.
`(B) In making the disclosures under subparagraph (A) the creditor shall
apply the annual interest rate that applies to that balance with respect to
the current billing cycle for that consumer in effect on the date on which
the disclosure is made.'.
(B) PUBLICATION OF MODEL FORMS- Not later than 180 days after the date
of enactment of this Act, the Board of Governors of the Federal Reserve
System shall publish model disclosure forms in accordance with section 105
of the Truth in Lending Act for the purpose of compliance with section
127(b)(11) of the Truth in Lending Act, as added by this
paragraph.
(C) CIVIL LIABILITY- Section 130(a) of the Truth in Lending Act (15
U.S.C. 1640(a)) is amended, in the undesignated paragraph following
paragraph (4), by striking the second sentence and inserting the
following: `In connection with the disclosures referred to in subsections
(a) and (b) of section 127, a creditor shall have a liability determined
under paragraph (2) of this subsection only for failing to comply with the
requirements of section 125, 127(a), or of paragraph (4), (5), (6), (7),
(8), (9), (10), or (11) of section 127(b), or for failing to comply with
disclosure requirements under State law for any term or item that the
Board has determined to be substantially the same in meaning under section
111(a)(2) as any of the terms or items referred to in section 127(a), or
paragraph (4), (5), (6), (7), (8), (9), (10), or (11) of section
127(b).'.
(2) Disclosures in connection with solicitations-
(A) IN GENERAL- Section 127(c)(1)(B) of the Truth in Lending Act (15
U.S.C. 1637(c)(1)(B)) is amended by adding at the end the
following:
`(iv) CREDIT WORKSHEET- An easily understandable credit worksheet
designed to aid consumers in determining their ability to assume more
debt, including consideration of the personal expenses of the consumer
and a simple formula for the consumer to determine whether the
assumption of additional debt is advisable.
`(v) BASIS OF PREAPPROVAL- In any case in which the application or
solicitation states that the consumer has been preapproved for an
account under an open end consumer credit plan, the following statement
must appear in a clear and conspicuous manner: `Your preapproval for
this credit card does not mean that we have reviewed your individual
financial circumstances. You should review your own budget before
accepting this offer of credit.'.
`(vi) AVAILABILITY OF CREDIT REPORT- That the consumer is entitled
to a copy of his or her credit report in accordance with the Fair Credit
Reporting Act.'.
(B) PUBLICATION OF MODEL FORMS- Not later than 180 days after the date
of enactment of this Act, the Board of Governors of the Federal Reserve
System shall publish model disclosure forms in accordance with section 105
of the Truth in Lending Act for the purpose of compliance with section
127(c)(1)(B) of the Truth in Lending Act, as amended by this
paragraph.
(b) EFFECTIVE DATE- This section and the amendments made by this section
shall take effect on January 1, 2001.
SEC. 210. VIOLATIONS OF THE AUTOMATIC STAY.
Section 362(a) of title 11, United States Code, is amended--
(1) in paragraph (7), by striking `and' at the end;
(2) in paragraph (8), by striking the period and inserting `;
and';
(3) by adding at the end the following:
`(9) any communication threatening a debtor, at any time after the
commencement and before the granting of a discharge in a case under this
title, of an intention--
`(A) to file a motion to determine the dischargeability of a
debt;
`(B) to file a motion under section 707(b) to dismiss or convert the
case; or
`(C) to repossess collateral from the debtor to which the stay
applies.'.
SEC. 211. DISCOURAGING ABUSIVE REAFFIRMATION PRACTICES.
Section 524 of title 11, United States Code, is amended--
(i) in subparagraph (A), by striking `and' at the end;
(ii) in subparagraph (B), by adding `and' after the semicolon;
and
(iii) by adding at the end the following:
`(C) such agreement contains a clear and conspicuous statement that
advises the debtor which portion of the debt to be reaffirmed is
attributable to--
`(iv) creditor's attorneys fees; or
`(v) expenses or other costs relating to the collection of the
debt;';
(B) in paragraph (5), by striking `and' after the semicolon;
(i) in subparagraph (A), by striking the period and inserting ` ;
except that'; and
(ii) by striking subparagraph (B) and inserting the
following:
`(B) to the extent that the debt is a consumer debt secured by real
property or is a debt described in paragraph (7), subparagraph (A) shall not
apply; and';
(E) by adding at the end the following:
`(7) in a case concerning an individual--
`(A)(i) if the consideration for such agreement is based in whole or
in part--
`(I) on an unsecured consumer debt; or
`(II) on a debt for an item of personalty with a value of $250 or
less at the point of purchase; and
`(ii) in which the creditor asserts a purchase money security
interest; and
`(B) if the court, approves such agreement as--
`(i) in the best interest of the debtor in light of the debtor's
income and expenses;
`(ii) not imposing an undue hardship on the future ability of the
debtor to pay for the needs of children and other dependents (including
court ordered support);
`(iii) not requiring the debtor to pay the creditor's attorney's
fees, expenses or other costs relating to the collection of the
debt;
`(iv) not entered into to protect property that is necessary for the
care and maintenance of children or other dependents that would have
nominal value on repossession;
`(v) not entered into after coercive threats or actions by the
creditor in the creditor's course of dealings with the debtor;
and
`(vi) not unfair because excessive in amount based upon the value of
the collateral.'; and
(2) in subsection (d)(2), by striking `requirements of subsection (c)(6)
of this section if the consideration for such agreement is based in whole or
in part on a consumer debt that is not secured by real property of the
debtor' and inserting `applicable requirements of paragraphs (6) and (7) of
subsection (c)'.
SEC. 212. SENSE OF CONGRESS REGARDING THE HOMESTEAD EXEMPTION.
(a) FINDINGS- The Congress finds that--
(1) one of the most flagrant abuses of the bankruptcy system involves
misuse of the homestead exemption under section 522 of title 11, United
States Code, which allows a debtor to exempt the debtor's home, up to a
certain value, as established by State law, from being sold off to satisfy
debts;
(2) while the vast majority of States responsibly cap the exemption at
not more than $40,000, 5 States exempt homes regardless of their
value;
(3) in the few States with unlimited homestead exemptions, debtors can
shield their assets in luxury homes, while legitimate creditors receive
little or nothing;
(4) beneficiaries of the homestead exemption include convicted insider
traders and savings and loan criminals, while shortchanged creditors include
children, spouses, governments, and banks; and
(5) the homestead exemption should be capped at $100,000 to prevent such
high-profile abuses.
(b) SENSE OF THE CONGRESS- It is the sense of the Congress that--
(1) meaningful bankruptcy reform cannot be achieved without capping the
homestead exemption; and
(2) bankruptcy reform legislation should include a cap of $100,000 on
the homestead exemption under title 11, United States Code.
SEC. 213. ENCOURAGING CREDITWORTHINESS.
(a) SENSE OF THE CONGRESS- It is the sense of the Congress that--
(1) certain lenders may sometimes offer credit to consumers
indiscriminately, without taking steps to ensure that consumers are capable
of repaying the resulting debt, and in a manner which may encourage certain
consumers to accumulate additional debt; and
(2) resulting consumer debt may increasingly be a major contributing
factor to consumer insolvency.
(b) STUDY REQUIRED- The Board of Governors of the Federal Reserve System
(referred to in this section as the `Board') shall conduct a study of--
(1) consumer credit industry practices of soliciting and extending
credit--
(B) without taking steps to ensure that consumers are capable of
repaying the resulting debt; and
(C) in a manner that encourages consumers to accumulate additional
debt; and
(2) the effects of such practices on consumer debt and insolvency.
(c) REPORT AND REGULATIONS- Not later than 24 months after the date of
enactment of this Act, the Board--
(1) shall make public a report on its findings with respect to the
indiscriminate solicitation and extension of credit by the credit
industry;
(2) may issue regulations that would require additional disclosures to
consumers in connection with extensions of credit; and
(3) may take any other actions, consistent with its existing statutory
authority, that the Board finds necessary to ensure responsible industrywide
practices and to prevent resulting consumer debt and insolvency.
SEC. 214. TREASURY DEPARTMENT STUDY REGARDING SECURITY INTERESTS UNDER AN
OPEN END CREDIT PLAN.
(a) STUDY- The Board of Governors of the Federal Reserve System (hereafter
in this section referred to as the `Board'), in consultation with the
Secretary of the Treasury, the general credit industry, and consumer groups,
shall conduct a study of the adequacy of information received by consumers
regarding the creation of security interests under open end credit plans (as
defined in the Truth in Lending Act).
(b) FINDINGS- The study required under subsection (a) shall include the
findings of the Board regarding--
(1) whether consumers understand at the time of purchase of property
under an open end credit plan that such property may serve as collateral
under that credit plan;
(2) whether consumers understand at the time of purchase the legal
consequences of disposing of property that is purchased under an open end
credit plan and is subject to a security interest under that plan; and
(3) whether creditors holding security interests in property purchased
under an open end credit plan use such security interests to coerce
reaffirmations of existing debts under section 524 of title 11, United
States Code.
(c) CONSIDERATIONS- In formulating the findings under subsection (b), the
Board shall consider, among other factors the Board determines relevant,
prevailing industry practices in this area.
(d) DISCLOSURE RECOMMENDATIONS- The study required under subsection (a)
shall include the recommendations of the Board regarding the utility and
practicality of additional disclosures by credit card issuers at the time of
purchase regarding security interests under open end credit plans,
including--
(1) disclosures of the specific property in which the creditor will
receive a security interest;
(2) disclosures of the consequences of nonpayment of the credit card
balance, including how the security interest may be enforced; and
(3) disclosures of the process by which payments made under the plan
will be credited with respect to the lien created by the security contract
and other debts under the plan.
(e) SUBMISSION OF REPORT- Not later than 180 days after the date of
enactment of this Act, the Board shall submit a report of its findings under
the study required by this section to the Committee on the Judiciary of the
Senate, the Committee on Banking, Housing, and Urban Affairs of the Senate,
the Committee on the Judiciary of the House of Representatives, and the
Committee on Banking and Financial Services of the House of
Representatives.
TITLE III--IMPROVED PROCEDURES FOR EFFICIENT ADMINISTRATION OF THE
BANKRUPTCY SYSTEM
SEC. 301. NOTICE OF ALTERNATIVES.
(a) IN GENERAL- Section 342 of title 11, United States Code, is amended by
striking subsection (b) and inserting the following:
`(b) Before the commencement of a case under this title by an individual
whose debts are primarily consumer debts, that individual shall be given or
obtain (as required in section 521(a)(1), as part of the certification process
under subchapter 1 of chapter 5) a written notice prescribed by the United
States trustee for the district in which the petition is filed under section
586 of title 28. The notice shall contain the following:
`(1) A brief description of chapters 7, 11, 12, and 13 and the general
purpose, benefits, and costs of proceeding under each of those
chapters.
`(2) A brief description of services that may be available to that
individual from a credit counseling service that is approved by the United
States trustee or the bankruptcy administrator for that district.'.
(b) DEBTOR'S DUTIES- Section 521 of title 11, United States Code, is
amended--
(1) by inserting `(a)' before `The debtor
(2) by striking paragraph (1) and inserting the following:
`(A) a list of creditors; and
`(B) unless the court orders otherwise--
`(i) a schedule of assets and liabilities;
`(ii) a schedule of current income and current
expenditures;
`(iii) a statement of the debtor's financial affairs and, if
applicable, a certificate--
`(I) of an attorney whose name is on the petition as the attorney
for the debtor or any bankruptcy petition preparer signing the
petition under section 110(b)(1) indicating that such attorney or
bankruptcy petition preparer delivered to the debtor any notice
required by section 342(b); or
`(II) if no attorney for the debtor is indicated and no bankruptcy
petition preparer signed the petition, of the debtor that such notice
was obtained and read by the debtor;
`(iv) copies of any Federal tax returns, including any schedules or
attachments, filed by the debtor for the 3-year period preceding the
order for relief;
`(v) copies of all payment advices or other evidence of payment, if
any, received by the debtor from any employer of the debtor in the
period 60 days prior to the filing of the petition;
`(vi) a statement of the amount of projected monthly net income,
itemized to show how calculated; and
`(vii) a statement disclosing any reasonably anticipated increase in
income or expenditures over the 12-month period following the date of
filing;'; and
(3) by adding at the end the following:
`(b)(1) At any time, a creditor, in the case of an individual under
chapter 7 or 13, may file with the court notice that the creditor requests the
petition, schedules, and a statement of affairs filed by the debtor in the
case and the court shall make those documents available to the creditor who
requests those documents.
`(2) At any time, a creditor, in a case under chapter 13, may file with
the court notice that the creditor requests the plan filed by the debtor in
the case and the court shall make that plan available to the creditor who
requests that plan.
`(c) An individual debtor in a case under chapter 7 or 13 shall file with
the court--
`(1) at the time filed with the taxing authority, all tax returns,
including any schedules or attachments, with respect to the period from the
commencement of the case until such time as the case is closed;
`(2) at the time filed with the taxing authority, all tax returns,
including any schedules or attachments, that were not filed with the taxing
authority when the schedules under subsection (a)(1) were
filed with respect to the period that is 3 years before the order for relief;
`(3) any amendments to any of the tax returns, including schedules or
attachments, described in paragraph (1) or (2); and
`(4) in a case under chapter 13, a statement subject to the penalties of
perjury by the debtor of the debtor's income and expenditures in the
preceding tax year and monthly income, that shows how the amounts are
calculated--
`(A) beginning on the date that is the later of 90 days after the
close of the debtor's tax year or 1 year after the order for relief,
unless a plan has been confirmed; and
`(B) thereafter, on or before the date that is 45 days before each
anniversary of the confirmation of the plan until the case is
closed.
`(d)(1) A statement referred to in subsection (c)(4) shall disclose--
`(A) the amount and sources of income of the debtor;
`(B) the identity of any persons responsible with the debtor for the
support of any dependents of the debtor; and
`(C) the identity of any persons who contributed, and the amount
contributed, to the household in which the debtor resides.
`(2) The tax returns, amendments, and statement of income and expenditures
described in paragraph (1) shall be available to the United States trustee,
any bankruptcy administrator, any trustee, and any party in interest for
inspection and copying, subject to the requirements of subsection (e).
`(e)(1) Not later than 30 days after the date of enactment of the Consumer
Bankruptcy Reform Act of 1999, the Director of the Administrative Office of
the United States Courts shall establish procedures for safeguarding the
confidentiality of any tax information required to be provided under this
section.
`(2) The procedures under paragraph (1) shall include restrictions on
creditor access to tax information that is required to be provided under this
section.
`(3) Not later than 1 year after the date of enactment of the Consumer
Bankruptcy Reform Act of 1999, the Director of the Administrative Office of
the United States Courts shall prepare, and submit to Congress a report
that--
`(A) assesses the effectiveness of the procedures under paragraph (1);
and
`(B) if appropriate, includes proposed legislation--
`(i) to further protect the confidentiality of tax information;
and
`(ii) to provide penalties for the improper use by any person of the
tax information required to be provided under this section.
`(f) If requested by the United States trustee or a trustee serving in the
case, the debtor provides a document that establishes the identity of the
debtor, including a driver's license, passport, or other document that
contains a photograph of the debtor and such other personal identifying
information relating to the debtor that establishes the identity of the
debtor.'.
(c) TITLE 28- Section 586(a) of title 28, United States Code, is
amended--
(1) in paragraph (5), by striking `and' at the end;
(2) in paragraph (6), by striking the period at the end and inserting `;
and'; and
(3) by adding at the end the following:
`(7) on or before January 1 of each calendar year, and also not later
than 30 days after any change in the nonprofit debt counseling services
registered with the bankruptcy court, prescribe and make available on
request the notice described in section 342(b)(3) of title 11 for each
district included in the region.'.
SEC. 302. FAIR TREATMENT OF SECURED CREDITORS UNDER CHAPTER 13.
(a) RESTORING THE FOUNDATION FOR SECURED CREDIT- Section 1325(a) of title
11, United States Code, is amended--
(1) in paragraph (5), by striking the matter preceding subparagraph (A)
and inserting the following:
`(5) with respect to an allowed claim provided for by the plan that is
secured under applicable nonbankruptcy law by reason of a lien on property
in which the estate has an interest or is subject to a setoff under section
553--'; and
(2) by adding at the end of the subsection the following flush
sentence:
`For purposes of paragraph (5), section 506 shall not apply to a claim
described in that paragraph.'.
(b) PAYMENT OF HOLDERS OF CLAIMS SECURED BY LIENS- Section
1325(a)(5)(B)(i) of title 11, United States Code, is amended to read as
follows:
`(B)(i) the plan provides that the holder of such claim retain the
lien securing such claim until the debt that is the subject of the claim
is fully paid for, as provided under the plan; and'.
(c) DETERMINATION OF SECURED STATUS- Section 506 of title 11, United
States Code, is amended by adding at the end the following:
`(e) Subsection (a) shall not apply to an allowed claim to the extent
attributable in whole or in part to the purchase price of personal property
acquired by the debtor during the 90-day period preceding the date of filing
of the petition.'.
SEC. 303. DISCOURAGEMENT OF BAD FAITH REPEAT FILINGS.
Section 362(c) of title 11, United States Code, is amended--
(1) by inserting `(1)' before `Except as';
(2) by striking `(1) the stay' and inserting `(A) the stay';
(3) by striking `(2) the stay' and inserting `(B) the stay';
(4) by striking `(A) the time' and inserting `(i) the time';
(5) by striking `(B) the time' and inserting `(ii) the time'; and
(6) by adding at the end the following:
`(2) Except as provided in subsections (d) through (f), the stay under
subsection (a) with respect to any action taken with respect to a debt or
property securing such debt or with respect to any lease shall terminate with
respect to the debtor on the 30th day after the filing of the later case
if--
`(A) a single or joint case is filed by or against an individual debtor
under chapter 7, 11, or 13; and
`(B) a single or joint case of that debtor (other than a case refiled
under a chapter other than chapter 7 after dismissal under section 707(b))
was pending during the preceding year but was dismissed.
`(3) If a party in interest so requests, the court may extend the stay in
a particular case with respect to 1 or more creditors (subject to such
conditions or limitations as the court may impose) after providing notice and
a hearing completed before the expiration of the 30-day period described in
paragraph (2) only if the party in interest demonstrates that the filing of
the later case is in good faith with respect to the creditors to be stayed.
`(4) A case shall be presumed to have not been filed in good faith (except
that such presumption may be rebutted by clear and convincing evidence to the
contrary)--
`(A) with respect to the creditors involved, if--
`(i) more than 1 previous case under any of chapters 7, 11, or 13 in
which the individual was a debtor was pending during the 1-year period
described in paragraph (1);
`(ii) a previous case under any of chapters 7, 11, or 13 in which the
individual was a debtor was dismissed within the period specified in
paragraph (2) after--
`(I) the debtor, after having received from the court a request to
do so, failed to file or amend the petition or other documents as
required by this title; or
`(II) the debtor, without substantial excuse, failed to perform the
terms of a plan that was confirmed by the court; or
`(iii)(I) during the period commencing with the dismissal of the next
most previous case under chapter 7, 11, or 13 there has not been a
substantial change in the financial or personal affairs of the
debtor;
`(II) if the case is a chapter 7 case, there is no other reason to
conclude that the later case will be concluded with a discharge;
or
`(III) if the case is a chapter 11 or 13 case, there is not a
confirmed plan that will be fully performed; and
`(B) with respect to any creditor that commenced an action under
subsection (d) in a previous case in which the individual was a debtor, if,
as of the date of dismissal of that case, that action was still pending or
had been resolved by terminating, conditioning, or limiting the stay with
respect to actions of that creditor.
`(5)(A) If a request is made for relief from the stay under subsection (a)
with respect to real or personal property of any kind, and the request is
granted in whole or in part, the court may, in addition to making any other
order under this subsection, order that the relief so granted shall be in rem
either--
`(i) for a definite period of not less than 1 year; or
`(B)(i) After an order is issued under subparagraph (A), the stay under
subsection (a) shall not apply to any property subject to such an in rem order
in any case of the debtor.
`(ii) If an in rem order issued under subparagraph (A) so provides, the
stay shall, in addition to being inapplicable to the debtor involved, not
apply with respect to an entity under this title if--
`(I) the entity had reason to know of the order at the time that the
entity obtained an interest in the property affected; or
`(II) the entity was notified of the commencement of the proceeding for
relief from the stay, and at the time of the notification, no case in which
the entity was a debtor was pending.
`(6) For purposes of this section, a case is pending during the period
beginning with the issuance of the order for relief and ending at such time as
the case involved is closed.'.
SEC. 304. TIMELY FILING AND CONFIRMATION OF PLANS UNDER CHAPTER 13.
(a) FILING OF PLAN- Section 1321 of title 11, United States Code, is
amended to read as follows:
`Sec. 1321. Filing of plan
`The debtor shall file a plan not later than 90 days after the order for
relief under this chapter, except that the court may extend such period if the
need for an extension is attributable to circumstances for which the debtor
should not justly be held accountable.'.
(b) CONFIRMATION OF HEARING- Section 1324 of title 11, United States Code,
is amended by adding at the
end the following: `That hearing shall be held not later than 45 days after
the filing of the plan, unless the court, after providing notice and a hearing,
orders otherwise.'.
SEC. 305. APPLICATION OF THE CODEBTOR STAY ONLY WHEN THE STAY PROTECTS THE
DEBTOR.
Section 1301(b) of title 11, United States Code, is amended--
(1) by inserting `(1)' after `(b)'; and
(2) by adding at the end the following:
`(2)(A) Notwithstanding subsection (c) and except as provided in
subparagraph (B), in any case in which the debtor did not receive the
consideration for the claim held by a creditor, the stay provided by
subsection (a) shall apply to that creditor for a period not to exceed 30 days
beginning on the date of the order for relief, to the extent the creditor
proceeds against--
`(i) the individual that received that consideration; or
`(ii) property not in the possession of the debtor that secures that
claim.
`(B) Notwithstanding subparagraph (A), the stay provided by subsection (a)
shall apply in any case in which the debtor is primarily obligated to pay the
creditor in whole or in part with respect to a claim described in subparagraph
(A) under a legally binding separation or property settlement agreement or
divorce or dissolution decree with respect to--
`(i) an individual described in subparagraph (A)(i); or
`(ii) property described in subparagraph (A)(ii).
`(3) Notwithstanding subsection (c), the stay provided by subsection (a)
shall terminate as of the date of confirmation of the plan, in any case in
which the plan of the debtor provides that the debtor's interest in personal
property subject to a lease with respect to which the debtor is the lessee
will be surrendered or abandoned or no payments will be made under the plan on
account of the debtor's obligations under the lease.'.
SEC. 306. IMPROVED BANKRUPTCY STATISTICS.
(a) AMENDMENT- Chapter 6 of part I of title 28, United States Code, is
amended by adding at the end the following:
`Sec. 159. Bankruptcy statistics
`(a) The clerk of each district shall compile statistics regarding
individual debtors with primarily consumer debts seeking relief under chapters
7, 11, and 13 of title 11. Those statistics shall be in a form prescribed by
the Director of the Administrative Office of the United States Courts
(referred to in this section as the `Office').
`(b) The Director shall--
`(1) compile the statistics referred to in subsection (a);
`(2) make the statistics available to the public; and
`(3) not later than October 31, 1999, and annually thereafter, prepare,
and submit to Congress a report concerning the information collected under
subsection (a) that contains an analysis of the information.
`(c) The compilation required under subsection (b) shall--
`(1) be itemized, by chapter, with respect to title 11;
`(2) be presented in the aggregate and for each district; and
`(3) include information concerning--
`(A) the total assets and total liabilities of the debtors described
in subsection (a), and in each category of assets and liabilities, as
reported in the schedules prescribed under section 2075 of this title and
filed by those debtors;
`(B) the current total monthly income, projected monthly net income,
and average income and average expenses of those debtors as reported on
the schedules and statements that each such debtor files under sections
111, 521, and 1322 of title 11;
`(C) the aggregate amount of debt discharged in the reporting period,
determined as the difference between the total amount of debt and
obligations of a debtor reported on the schedules and the amount of such
debt reported in categories which are predominantly
nondischargeable;
`(D) the average period of time between the filing of the petition and
the closing of the case;
`(E) for the reporting period--
`(i) the number of cases in which a reaffirmation was filed;
and
`(ii)(I) the total number of reaffirmations filed;
`(II) of those cases in which a reaffirmation was filed, the number
in which the debtor was not represented by an attorney; and
`(III) of those cases, the number of cases in which the
reaffirmation was approved by the court;
`(F) with respect to cases filed under chapter 13 of title 11, for the
reporting period--
`(i)(I) the number of cases in which a final order was entered
determining the value of property securing a claim in an amount less
than the amount of the claim; and
`(II) the number of final orders determining the value of property
securing a claim issued;
`(ii) the number of cases dismissed for failure to make payments
under the plan; and
`(iii) the number of cases in which the debtor filed another case
within the 6 years previous to the filing; and
`(G) the extent of creditor misconduct and any amount of punitive
damages awarded by the court for creditor misconduct.'.
(b) CLERICAL AMENDMENT- The table of sections for chapter 6 of title 28,
United States Code, is amended by adding at the end the following:
`159. Bankruptcy statistics.'.
(c) EFFECTIVE DATE- The amendments made by this section shall take effect
18 months after the date of enactment of this Act.
SEC. 307. AUDIT PROCEDURES.
(a) AMENDMENTS- Section 586 of title 28, United States Code, is
amended--
(1) in subsection (a), as amended by section 301 of this Act, by
striking paragraph (6) and inserting the following:
`(6) make such reports as the Attorney General directs, including the
results of audits performed under subsection (f); and'; and
(2) by adding at the end the following:
`(f)(1)(A) The Attorney General shall establish procedures to determine
the accuracy and completeness of petitions, schedules, and other information
which the debtor is required to provide under sections 521 and 1322 of title
11, and, if applicable, section 111 of title 11, in individual cases filed
under chapter 7 or 13 of such title.
`(B) Those procedures shall--
`(i) establish a method of selecting appropriate qualified persons to
contract to perform those audits;
`(ii) establish a method of randomly selecting cases to be audited,
except that not less than 1 out of every 500 cases in each Federal judicial
district shall be selected for audit;
`(iii) require audits for schedules of income and expenses which reflect
greater than average variances from the statistical norm of the district in
which the schedules were filed; and
`(iv) establish procedures for providing, not less frequently than
annually, public information concerning the aggregate results of such audits
including the percentage of cases, by district, in which a material
misstatement of income or expenditures is reported.
`(2) The United States trustee for each district is authorized to contract
with auditors to perform audits in cases designated by the United States
trustee according to the procedures established under paragraph (1).
`(3)(A) The report of each audit conducted under this subsection shall be
filed with the court and transmitted to the United States trustee. Each report
shall clearly and conspicuously specify any material misstatement of income or
expenditures or of assets identified by the person performing the audit. In
any case where a material misstatement of income or expenditures or of assets
has been reported, the clerk of the bankruptcy court shall give notice of the
misstatement to the creditors in the case.
`(B) If a material misstatement of income or expenditures or of assets is
reported the United States trustee shall--
`(i) report the material misstatement, if appropriate, to the United
States Attorney under section 3057 of title 18; and
`(ii) if advisable, take appropriate action, including but not limited
to commencing an adversary proceeding to revoke the debtor's discharge under
section 727(d) of title 11.'.
(b) AMENDMENTS TO SECTION 521 OF TITLE 11, UNITED STATES CODE- Section
521(a) of title 11, United States Code, as amended by section 301(b) of this
Act, is amended in paragraphs (3) and (4) by inserting `or an auditor
appointed under section 586 of title 28' after `serving in the case' each
place it appears.
(c) AMENDMENTS TO SECTION 727 OF TITLE 11, UNITED STATES CODE- Section
727(d) of title 11, United States Code, is amended--
(1) in paragraph (2), by striking `or' at the end;
(2) in paragraph (3), by striking the period and inserting `; or';
and
(3) by adding at the end the following:
`(4) the debtor has failed to explain satisfactorily--
`(A) a material misstatement in an audit performed under section
586(f) of title 28; or
`(B) a failure to make available for inspection all necessary
accounts, papers, documents, financial records, files and all other
papers, things, or property belonging to the debtor that are requested for
an audit conducted under section 586(f) of title 28.'.
(d) EFFECTIVE DATE- The amendments made by this section shall take effect
18 months after the date of enactment of this Act.
SEC. 308. CREDITOR REPRESENTATION AT FIRST MEETING OF CREDITORS.
Section 341(c) of title 11, United States Code, is amended--
(1) by inserting `(1)' after `(c)'; and
(2) by adding at the end the following:
`(2) Notwithstanding any local court rule, provision of a State
constitution, any other Federal or State law that is not a bankruptcy law,
or other requirement that representation at the meeting of creditors under
subsection (a) be by an attorney, a creditor holding a consumer debt or any
representative of the creditor (which may include an entity or an employee
of an entity and may be a representative for more than 1 creditor) shall be
permitted to appear at and participate in the meeting of creditors in a case
under chapter 7 or 13, either alone or in conjunction with an attorney for
the creditor.
`(3) Nothing in this subsection shall be construed to require any
creditor to be represented by an attorney at any meeting of
creditors.'.
SEC. 309. FAIR NOTICE FOR CREDITORS IN CHAPTER 7 AND 13 CASES.
Section 342 of title 11, United States Code, is amended--
(1) in subsection (c), by striking `, but the failure of such notice to
contain such information shall not invalidate the legal effect of such
notice'; and
(2) by adding at the end the following:
`(d)(1) If the credit agreement between the debtor and the creditor or the
last communication before the filing of the petition in a voluntary case from
the creditor to a debtor who is an individual states an account number of the
debtor that is the current account number of the debtor with respect to any
debt held by the creditor against the debtor, the debtor shall include that
account
number in any notice to the creditor required to be given under this title.
`(2) If the creditor has specified to the debtor, in the last
communication before the filing of the petition, an address at which the
creditor wishes to receive correspondence regarding the debtor's account, any
notice to the creditor required to be given by the debtor under this title
shall be given at such address.
`(3) For purposes of this section, the term `notice' includes--
`(A) any correspondence from the debtor to the creditor after the
commencement of the case;
`(B) any statement of the debtor's intention under section
521(a)(2);
`(C) notice of the commencement of any proceeding in the case to which
the creditor is a party; and
`(D) any notice of a hearing under section 1324.
`(e)(1) At any time, a creditor, in a case of an individual under chapter
7 or 13, may file with the court and serve on the debtor a notice of the
address to be used to notify the creditor in that case.
`(2) If the court or the debtor is required to give the creditor notice,
not later than 5 days after receipt of the notice under paragraph (1), that
notice shall be given at that address.
`(f) An entity may file with the court a notice stating its address for
notice in cases under chapter 7 or 13. After the date that is 30 days
following the filing of that notice, any notice in any case filed under
chapter 7 or 13 given by the court shall be to that address unless specific
notice is given under subsection (e) with respect to a particular case.
`(g)(1) Notice given to a creditor other than as provided in this section
shall not be effective notice until that notice has been brought to the
attention of the creditor.
`(2) If the creditor has designated a person or department to be
responsible for receiving notices concerning bankruptcy cases and has
established reasonable procedures so that bankruptcy notices received by the
creditor will be delivered to that department or person, notice shall not be
brought to the attention of the creditor until that notice is received by that
person or department.'.
SEC. 310. STOPPING ABUSIVE CONVERSIONS FROM CHAPTER 13.
Section 348(f)(1) of title 11, United States Code, is amended--
(1) in subparagraph (A), by striking `and' at the end;
(2) in subparagraph (B)--
(A) by striking `in the converted case, with allowed secured claims'
and inserting `only in a case converted to chapter 11 or 12 but not in a
case converted to chapter 7, with allowed secured claims in cases under
chapters 11 and 12'; and
(B) by striking the period and inserting `; and'; and
(3) by adding at the end the following:
`(C) with respect to cases converted from chapter 13, the claim of any
creditor holding security as of the date of the petition shall continue to
be secured by that security unless the full amount of that claim determined
under applicable nonbankruptcy law has been paid in full as of the date of
conversion, notwithstanding any valuation or determination of the amount of
an allowed secured claim made for the purposes of the chapter 13
proceeding.'.
SEC. 311. PROMPT RELIEF FROM STAY IN INDIVIDUAL CASES.
Section 362(e) of title 11, United States Code, is amended--
(1) by inserting `(1)' after `(e)'; and
(2) by adding at the end the following:
`(2) Notwithstanding paragraph (1), in the case of an individual filing
under chapter 7, 11, or 13, the stay under subsection (a) shall terminate on
the date that is 60 days after a request is made by a party in interest under
subsection (d), unless--
`(A) a final decision is rendered by the court during the 60-day period
beginning on the date of the request; or
`(B) that 60-day period is extended--
`(i) by agreement of all parties in interest; or
`(ii) by the court for such specific period of time as the court finds
is required for good cause.'.
SEC. 312. DISMISSAL FOR FAILURE TO TIMELY FILE SCHEDULES OR PROVIDE REQUIRED
INFORMATION.
Section 707 of title 11, United States Code, as amended by section 102 of
this Act, is amended by adding at the end the following:
`(c)(1) Notwithstanding subsection (a), and subject to paragraph (2), if
an individual debtor in a voluntary case under chapter 7 or 13 fails to file
all of the information required under section 521(a)(1) within 45 days after
the filing of the petition commencing the case, the case
shall be automatically dismissed effective on the 46th day after the filing
of the petition.
`(2) With respect to a case described in paragraph (1), any party in
interest may request the court to enter an order dismissing the case. The
court shall, if so requested, enter an order of dismissal not later than 5
days after that request.
`(3) Upon request of the debtor made within 45 days after the filing of
the petition commencing a case described in paragraph (1), the court may allow
the debtor an additional period of not to exceed 50 days to file the
information required under section 521(a)(1) if the court finds justification
for extending the period for the filing.'.
SEC. 313. ADEQUATE TIME FOR PREPARATION FOR A HEARING ON CONFIRMATION OF THE
PLAN.
Section 1324 of title 11, United States Code, as amended by section 304 of
this Act, is amended--
(1) by striking `After' and inserting the following:
`(a) Except as provided in subsection (b) and after'; and
(2) by adding at the end the following:
`(b) If not later than 5 days after receiving notice of a hearing on
confirmation of the plan, a creditor objects to the confirmation of the plan,
the hearing on confirmation of the plan may be held no earlier than 20 days
after the first meeting of creditors under section 341(a).'.
SEC. 314. DISCHARGE UNDER CHAPTER 13.
Section 1328(a) of title 11, United States Code, is amended by striking
paragraphs (1) through (3) and inserting the following:
`(1) provided for under section 1322(b)(5);
`(2) of the kind specified in paragraph (2), (4), (5), (8), or (9) of
section 523(a);
`(3) for restitution, or a criminal fine, included in a sentence on the
debtor's conviction of a crime; or
`(4) for restitution, or damages, awarded in a civil action against the
debtor as a result of willful or malicious injury by the debtor that caused
personal injury to an individual or the death of an individual.'.
SEC. 315. NONDISCHARGEABLE DEBTS.
Section 523(a) of title 11, United States Code, is amended by inserting
after paragraph (14) the following:
`(14A) incurred to pay a debt that is nondischargeable by reason of
section 727, 1141, 1228 (a) or (b), or 1328(b), or any other provision of
this subsection, if the debtor incurred the debt to pay such a
nondischargeable debt with the intent to discharge in bankruptcy the newly
created debt.'.
SEC. 316. CREDIT EXTENSIONS ON THE EVE OF BANKRUPTCY PRESUMED
NONDISCHARGEABLE.
Section 523(a)(2) of title 11, United States Code, as amended by section
202 of this Act, is amended--
(1) in subparagraph (A), by striking the semicolon at the end and
inserting the following: `(and, for purposes of this subparagraph, consumer
debts owed in an aggregate amount greater than or equal to $400 incurred for
goods or services not reasonably necessary for the maintenance or support of
the debtor or a dependent child of the debtor to a single creditor that are
incurred during the 90-day period preceding the date of the order for relief
shall be presumed to be nondischargeable under this subparagraph);
or';
(2) in subparagraph (B), by striking `or' at the end; and
(3) by striking subparagraph (C).
SEC. 317. DEFINITION OF HOUSEHOLD GOODS AND ANTIQUES.
(a) IN GENERAL- Not later than 180 days after the date of enactment of
this Act, the Federal Trade Commission shall promulgate regulations defining
the term `household goods', to be applied to section 522(d)(3) of title 11,
United States Code, in a manner suitable and appropriate for cases under that
title.
(b) ABSENCE OF FINAL REGULATIONS- If final regulations are not promulgated
under subsection (a) and in effect by the date that is 180 days after the date
enactment of this Act, then, for purposes of section 522(d)(3) of title 11,
United States Code, the term `household goods' shall have the meaning given
that term in section 444.1(i) of title 16, Code of Federal Regulations, except
that the term shall also include any tangible personal property reasonably
necessary for the maintenance or support of a dependent child.
SEC. 318. RELIEF FROM STAY WHEN THE DEBTOR DOES NOT COMPLETE INTENDED
SURRENDER OF CONSUMER DEBT COLLATERAL.
(a) AUTOMATIC STAY- Section 362 of title 11, United States Code, as
amended by section 303 of this Act, is amended--
(1) in subsection (c)(1), in the matter preceding subparagraph (A), by
striking `(e) and (f)' and inserting `(e), (f), and (h)';
(2) by redesignating subsection (h) as subsection (i); and
(3) by inserting after subsection (g) the following:
`(h) In an individual case under chapter 7, 11, or 13 the stay provided by
subsection (a) is terminated with respect to property of the estate securing
in whole or in part a claim that is in an amount greater than $3,000, or
subject to an unexpired lease with a remaining term of at least 1 year (in any
case in which the debtor owes at least $3,000 for a 1-year period), if within
30 days after the expiration of the applicable period under section
521(a)(2)--
`(1)(A) the debtor fails to timely file a statement of intention to
surrender or retain the property; or
`(B) if the debtor indicates in the filing that the debtor will retain
the property, the debtor fails to meet an applicable requirement to--
`(I) redeem the property pursuant to section 722; or
`(II) reaffirm the debt the property secures pursuant to section
524(c); or
`(ii) assume the unexpired lease pursuant to section 365(d) if the
trustee does not do so; or
`(2) the debtor fails to timely take the action specified in a statement
of intention referred to in paragraph (1)(A) (as amended, if that statement
is amended before expiration of the period for taking action),
unless--
`(A) the statement of intention specifies reaffirmation; and
`(B) the creditor refuses to reaffirm the debt on the original
contract terms for the debt.'.
(b) DEBTOR'S DUTIES- Section 521(a)(2) of title 11, United States Code, as
redesignated by section 301(b) of this Act, is amended--
(1) in the matter preceding subparagraph (A), by striking
`consumer';
(2) in subparagraph (B)--
(A) by striking `forty-five days after the filing of a notice of
intent under this section' and inserting `30 days after the first meeting
of creditors under section 341(a)'; and
(B) by striking `forty-five-day period' and inserting `30-day period';
and
(3) in subparagraph (C), by inserting `, except as provided in section
362(h)' before the semicolon.
SEC. 319. ADEQUATE PROTECTION OF LESSORS AND PURCHASE MONEY SECURED
CREDITORS.
(a) IN GENERAL- Chapter 13 of title 11, United States Code, is amended by
adding after section 1307 the following:
`Sec. 1307A. Adequate protection in chapter 13 cases
`(a)(1)(A) On or before the date that is 30 days after the filing of a
case under this chapter, the debtor shall make cash payments in an amount
determined under paragraph (2)(A), to--
`(i) any lessor of personal property; and
`(ii) any creditor holding a claim secured by personal property to the
extent that the claim is attributable to the purchase of that property by
the debtor.
`(B) The debtor or the plan shall continue making the adequate protection
payments until the earlier of the date on which--
`(i) the creditor begins to receive actual payments under the plan;
or
`(ii) the debtor relinquishes possession of the property referred to in
subparagraph (A) to--
`(I) the lessor or creditor; or
`(II) any third party acting under claim of right, as
applicable.
`(2) The payments referred to in paragraph (1)(A) shall be determined by
the court.
`(b)(1) Subject to the limitations under paragraph (2), the court may,
after notice and hearing, change the amount and timing of the dates of payment
of payments made under subsection (a).
`(2)(A) The payments referred to in paragraph (1) shall be payable not
less frequently than monthly.
`(B) The amount of a payment referred to in paragraph (1) shall not be
less than the reasonable depreciation of the personal property described in
subsection (a)(1), determined on a month-to-month basis.
`(c) Notwithstanding section 1326(b), the payments referred to in
subsection (a)(1)(A) shall be continued in addition to plan payments under a
confirmed plan until actual payments to the creditor begin under that plan, if
the confirmed plan provides--
`(1) for payments to a creditor or lessor described in subsection
(a)(1); and
`(2) for the deferral of payments to such creditor or lessor under the
plan until the payment of amounts described in section 1326(b).
`(d) Notwithstanding sections 362, 542, and 543, a lessor or creditor
described in subsection (a) may retain possession of property described in
that subsection that was obtained in accordance with applicable law before the
date of filing of the petition until the first payment under subsection
(a)(1)(A) is received by the lessor or creditor.'.
(b) CLERICAL AMENDMENT- The table of sections for chapter 13 of title 11,
United States Code, is amended by inserting after the item relating to section
1307 the following:
`1307A. Adequate protection in chapter 13 cases.'.
SEC. 320. LIMITATION.
Section 522 of title 11, United States Code, is amended--
(1) in subsection (b)(2)(A), by inserting `subject to subsection (n),'
before `any property'; and
(2) by adding at the end the following new subsection:
`(n)(1) Except as provided in paragraph (2), as a result of electing under
subsection (b)(2)(A) to exempt property under State or local law, a debtor may
not exempt any amount of interest that exceeds in the aggregate $100,000 in
value in--
`(A) real or personal property that the debtor or a dependent of the
debtor uses as a residence;
`(B) a cooperative that owns property that the debtor or a dependent of
the debtor uses as a residence; or
`(C) a burial plot for the debtor or a dependent of the debtor.
`(2) The limitation under paragraph (1) shall not apply to an exemption
claimed under subsection (b)(2)(A) by a family farmer for the principal
residence of that farmer.'.
SEC. 321. MISCELLANEOUS IMPROVEMENTS.
(a) WHO MAY BE A DEBTOR- Section 109 of title 11, United States Code, is
amended by adding at the end the following:
`(h)(1) Subject to paragraphs (2) and (3) and notwithstanding any other
provision of this section, an individual may not be a debtor under this title
unless that individual has, during the 90-day period preceding the date of
filing of the petition of that individual, received credit counseling,
including, at a minimum, participation in an individual or group briefing that
outlined the opportunities for available credit counseling and assisted that
individual in performing an initial budget analysis, through a credit
counseling program (offered through an approved credit counseling service
described in section 111(a)) that has been approved by--
`(A) the United States trustee; or
`(B) the bankruptcy administrator for the district in which the petition
is filed.'.
`(2)(A) Paragraph (1) shall not apply with respect to a debtor who resides
in a district for which the United States trustee or bankruptcy administrator
of the bankruptcy court of that district determines that the approved credit
counseling services for that district are not reasonably able to provide
adequate services to the additional individuals who would otherwise seek
credit counseling from those programs by reason of the requirements of
paragraph (1).
`(B) Each United States trustee or bankruptcy administrator that makes a
determination under subparagraph (A) shall review that determination not later
than 1 year after the date of that determination, and not less frequently than
annually thereafter.
`(3)(A) Subject to subparagraph (B), the requirements of paragraph (1)
shall not apply with respect to a debtor who submits to the court a
certification that--
`(i) describes exigent circumstances that merit a waiver of the
requirements of paragraph (1);
`(ii) states that the debtor requested credit counseling services from
an approved credit counseling service, but was unable to obtain the services
referred to in paragraph (1) during the 5-day period beginning on the date
on which the debtor made that request; and
`(iii) is satisfactory to the court.
`(B) With respect to a debtor, an exemption under subparagraph (A) shall
cease to apply to that debtor on the date on which the debtor meets the
requirements of paragraph (1), but in no case may the exemption apply to that
debtor after the date that is 30 days after the debtor files a petition.'.
(b) CHAPTER 7 DISCHARGE- Section 727(a) of title 11, United States Code,
is amended--
(1) in paragraph (9), by striking `or' at the end;
(2) in paragraph (10), by striking the period and inserting `; or';
and
(3) by adding at the end the following:
`(11) after the filing of the petition, the debtor failed to complete an
instructional course concerning personal financial management described in
section 111 that was administered or approved by--
`(A) the United States trustee; or
`(B) the bankruptcy administrator for the district in which the
petition is filed.'.
(c) CHAPTER 13 DISCHARGE- Section 1328 of title 11, United States Code, is
amended by adding at the end the following:
`(f) The court shall not grant a discharge under this section to a debtor,
unless after filing a petition the debtor has completed an instructional
course concerning personal financial management described in section 111 that
was administered or approved by--
`(1) the United States trustee; or
`(2) the bankruptcy administrator for the district in which the petition
is filed.'.
(d) DEBTOR'S DUTIES- Section 521 of title 11, United States Code, as
amended by section 318(b) of this Act, is amended by adding at the end the
following:
`(e) In addition to the requirements under subsection (a), an individual
debtor shall file with the court--
`(1) a certificate from the credit counseling service that provided the
debtor services under section 109(h); and
`(2) a copy of the debt repayment plan, if any, developed under section
109(h) through the credit counseling service referred to in paragraph
(1).'.
(e) EXCEPTIONS TO DISCHARGE- Section 523(d) of title 11, United States
Code, as amended by section 202 of this Act, is amended by striking paragraph
(3)(A)(i) and inserting the following:
`(i) within the applicable period of time prescribed under section
109(h), the debtor received credit counseling through a credit counseling
program in accordance with section 109(h); and'.
(1) IN GENERAL- Chapter 1 of title 11, United States Code, is amended by
adding at the end the following:
`Sec. 111. Credit counseling services; financial management instructional
courses
`(a) The clerk of each district shall maintain a list of credit counseling
services that provide one or more programs described in section 109(h) and
that have been approved by--
`(1) the United States trustee; or
`(2) the bankruptcy administrator for the district.
`(b) The United States trustee or each bankruptcy administrator referred
to in subsection (a)(1) shall--
`(1) make available to debtors who are individuals an instructional
course concerning personal financial management, under the direction of the
bankruptcy court; and
`(2) maintain a list of instructional courses concerning personal
financial management that are operated by a private entity and that have
been approved by the United States trustee or that bankruptcy
administrator.'.
(2) CLERICAL AMENDMENT- The table of sections for chapter 1 of title 11,
United States Code, is amended by adding at the end the following:
`111. Credit counseling services; financial management instructional
courses.'.
(g) DEFINITIONS- Section 101 of title 11, United States Code, is
amended--
(1) by inserting after paragraph (13) the following:
`(13A) `debtor's principal residence'--
`(A) means a residential structure, including incidental property,
without regard to whether that structure is attached to real property;
and
`(B) includes an individual condominium or co-operative unit;';
and
(2) by inserting after paragraph (27), the following:
`(27A) `incidental property' means, with respect to a debtor's principal
residence--
`(A) property commonly conveyed with a principal residence in the area
where the real estate is located;
`(B) all easements, rights, appurtenances, fixtures, rents, royalties,
mineral rights, oil or
gas rights or profits, water rights, escrow funds, or insurance proceeds; and
`(C) all replacements or additions;'.
SEC. 322. BANKRUPTCY JUDGESHIPS.
(a) SHORT TITLE- This section may be cited as the `Bankruptcy Judgeship
Act of 1999'.
(b) TEMPORARY JUDGESHIPS-
(1) APPOINTMENTS- The following judgeship positions shall be filled in
the manner prescribed in section 152(a)(1) of title 28, United States Code,
for the appointment of bankruptcy judges provided for in section 152(a)(2)
of such title:
(A) One additional bankruptcy judgeship for the eastern district of
California.
(B) Four additional bankruptcy judgeships for the central district of
California.
(C) One additional bankruptcy judgeship for the southern district of
Florida.
(D) Two additional bankruptcy judgeships for the district of
Maryland.
(E) One additional bankruptcy judgeship for the eastern district of
Michigan.
(F) One additional bankruptcy judgeship for the southern district of
Mississippi.
(G) One additional bankruptcy judgeship for the district of New
Jersey.
(H) One additional bankruptcy judgeship for the eastern district of
New York.
(I) One additional bankruptcy judgeship for the northern district of
New York.
(J) One additional bankruptcy judgeship for the southern district of
New York.
(K) One additional bankruptcy judgeship for the eastern district of
Pennsylvania.
(L) One additional bankruptcy judgeship for the middle district of
Pennsylvania.
(M) One additional bankruptcy judgeship for the western district of
Tennessee.
(N) One additional bankruptcy judgeship for the eastern district of
Virginia.
(2) VACANCIES- The first vacancy occurring in the office of a bankruptcy
judge in each of the judicial districts set forth in paragraph (1)
that--
(A) results from the death, retirement, resignation, or removal of a
bankruptcy judge; and
(B) occurs 5 years or more after the appointment date of a bankruptcy
judge appointed under paragraph (1);
(1) IN GENERAL- The temporary bankruptcy judgeship positions authorized
for the northern district of Alabama, the district of Delaware, the district
of Puerto Rico, the district of South Carolina, and the eastern district of
Tennessee under section 3(a) (1), (3), (7), (8), and (9) of the Bankruptcy
Judgeship Act of 1992 (28 U.S.C. 152 note) are extended until the first
vacancy occurring in the office of a bankruptcy judge in the applicable
district resulting from the death, retirement, resignation, or removal of a
bankruptcy judge and occurring--
(A) 8 years or more after November 8, 1993, with respect to the
northern district of Alabama;
(B) 10 years or more after October 28, 1993, with respect to the
district of Delaware;
(C) 8 years or more after August 29, 1994, with respect to the
district of Puerto Rico;
(D) 8 years or more after June 27, 1994, with respect to the district
of South Carolina; and
(E) 8 years or more after November 23, 1993, with respect to the
eastern district of Tennessee.
(2) APPLICABILITY OF OTHER PROVISIONS- All other provisions of section 3
of the Bankruptcy Judgeship Act of 1992 remain applicable to such temporary
judgeship position.
(d) TECHNICAL AMENDMENT- The first sentence of section 152(a)(1) of title
28, United States Code, is amended to read as follows: `Each bankruptcy judge
to be appointed for a judicial district as provided in paragraph (2) shall be
appointed by the United States court of appeals for the circuit in which such
district is located.'.
(e) TRAVEL EXPENSES OF BANKRUPTCY JUDGES- Section 156 of title 28, United
States Code, is amended by adding at the end the following new subsection:
`(g)(1) In this subsection, the term `travel expenses'--
`(A) means the expenses incurred by a bankruptcy judge for travel that
is not directly related to any case assigned to such bankruptcy judge;
and
`(B) shall not include the travel expenses of a bankruptcy judge
if--
`(i) the payment for the travel expenses is paid by such bankruptcy
judge from the personal funds of such bankruptcy judge; and
`(ii) such bankruptcy judge does not receive funds (including
reimbursement) from the United States or any other person or entity for
the payment of such travel expenses.
`(2) Each bankruptcy judge shall annually submit the information required
under paragraph (3) to the chief bankruptcy judge for the district in which
the bankruptcy judge is assigned.
`(3)(A) Each chief bankruptcy judge shall submit an annual report to the
Director of the Administrative Office of the United States Courts on the
travel expenses of each bankruptcy judge assigned to the applicable district
(including the travel expenses of the chief bankruptcy judge of such
district).
`(B) The annual report under this paragraph shall include--
`(i) the travel expenses of each bankruptcy judge, with the name of the
bankruptcy judge to whom the travel expenses apply;
`(ii) a description of the subject matter and purpose of the travel
relating to each travel expense
identified under clause (i), with the name of the bankruptcy judge to whom
the travel applies; and
`(iii) the number of days of each travel described under clause (ii),
with the name of the bankruptcy judge to whom the travel applies.
`(4)(A) The Director of the Administrative Office of the United States
Courts shall--
`(i) consolidate the reports submitted under paragraph (3) into a single
report; and
`(ii) annually submit such consolidated report to Congress.
`(B) The consolidated report submitted under this paragraph shall include
the specific information required under paragraph (3)(B), including the name
of each bankruptcy judge with respect to clauses (i), (ii), and (iii) of
paragraph (3)(B).'.
SEC. 323. DEFINITION OF DOMESTIC SUPPORT OBLIGATION.
Section 101 of title 11, United States Code, as amended by section 321(g)
of this Act, is amended--
(1) by striking paragraph (12A); and
(2) by inserting after paragraph (14) the following:
`(14A) `domestic support obligation' means a debt that accrues before or
after the entry of an order for relief under this title that is--
`(A) owed to or recoverable by--
`(i) a spouse, former spouse, or child of the debtor or that child's
legal guardian; or
`(ii) a governmental unit;
`(B) in the nature of alimony, maintenance, or support (including
assistance provided by a governmental unit) of such spouse, former spouse,
or child, without regard to whether such debt is expressly so
designated;
`(C) established or subject to establishment before or after entry of
an order for relief under this title, by reason of applicable provisions
of--
`(i) a separation agreement, divorce decree, or property settlement
agreement;
`(ii) an order of a court of record; or
`(iii) a determination made in accordance with applicable
nonbankruptcy law by a governmental unit; and
`(D) not assigned to a nongovernmental entity, unless that obligation
is assigned voluntarily by the spouse, former spouse, child, or parent
solely for the purpose of collecting the debt.'.
SEC. 324. PRIORITIES FOR CLAIMS FOR DOMESTIC SUPPORT OBLIGATIONS.
Section 507(a) of title 11, United States Code, is amended--
(1) by striking paragraph (7);
(2) by redesignating paragraphs (1) through (6) as paragraphs (2)
through (7), respectively;
(3) in paragraph (2), as redesignated, by striking `First' and inserting
`Second';
(4) in paragraph (3), as redesignated, by striking `Second' and
inserting `Third';
(5) in paragraph (4), as redesignated, by striking `Third' and inserting
`Fourth';
(6) in paragraph (5), as redesignated, by striking `Fourth' and
inserting `Fifth';
(7) in paragraph (6), as redesignated, by striking `Fifth' and inserting
`Sixth';
(8) in paragraph (7), as redesignated, by striking `Sixth' and inserting
`Seventh'; and
(9) by inserting before paragraph (2), as redesignated, the
following:
`(1) First, allowed claims for domestic support obligations to be paid in
the following order on the condition that funds received under this paragraph
by a governmental unit in a case under this title be applied:
`(A) Claims that, as of the date of entry of the order for relief, are
owed directly to a spouse, former spouse, or child of the debtor, or the
parent of such child, without regard to whether the claim is filed by the
spouse, former spouse, child, or parent, or is filed by a governmental unit
on behalf of that person.
`(B) Claims that, as of the date of entry of the order for relief, are
assigned by a spouse, former spouse, child of the debtor, or the parent of
that child to a governmental unit or are owed directly to a governmental
unit under applicable nonbankruptcy law.'.
SEC. 325. REQUIREMENTS TO OBTAIN CONFIRMATION AND DISCHARGE IN CASES
INVOLVING DOMESTIC SUPPORT OBLIGATIONS.
Title 11, United States Code, is amended--
(1) in section 1129(a), by adding at the end the following:
`(14) If the debtor is required by a judicial or administrative order or
statute to pay a domestic support obligation, the debtor has paid all
amounts payable under such order or statute for such obligation that become
payable after the date on which the petition is filed.';
(A) in paragraph (5), by striking `and' at the end;
(B) in paragraph (6), by striking the period at the end and inserting
`; and'; and
(C) by adding at the end the following:
`(7) if the debtor is required by a judicial or administrative order or
statute to pay a domestic support obligation, the debtor has paid all
amounts payable under such order for such obligation that become payable
after the date on which the petition is filed.'; and
(3) in section 1328(a), as amended by section 314 of this Act, in the
matter preceding paragraph (1), by inserting `, and with respect to a debtor
who is required by a judicial or administrative order to pay a domestic
support obligation, certifies that all amounts payable under such order or
statute that are due on or before the date of the certification (including
amounts due before or after the petition was
filed) have been paid' after `completion by the debtor of all payments under
the plan'.
SEC. 326. EXCEPTIONS TO AUTOMATIC STAY IN DOMESTIC SUPPORT OBLIGATION
PROCEEDINGS.
Section 362(b) of title 11, United States Code, is amended--
(1) by striking paragraph (2) and inserting the following:
`(2) under subsection (a)--
`(A) of the commencement or continuation of an action or proceeding
for--
`(i) the establishment of paternity as a part of an effort to
collect domestic support obligations; or
`(ii) the establishment or modification of an order for domestic
support obligations; or
`(B) the collection of a domestic support obligation from property
that is not property of the estate;';
(2) by inserting after paragraph (4) the following:
`(5) under subsection (a) with respect to the withholding of income
pursuant to an order as specified in section 466(b) of the Social Security
Act (42 U.S.C. 666(b));
(3) in paragraph (17), by striking `or' at the end;
(4) in paragraph (18), by striking the period and inserting `; or';
and
(5) by inserting after paragraph (18) the following:
`(19) under subsection (a) with respect to--
`(A) the withholding, suspension, or restriction of drivers' licenses,
professional and occupational licenses, and recreational licenses pursuant
to State law, as specified in section 466(a)(16) of the Social Security
Act (42 U.S.C. 666(a)(16)) or with respect to the reporting of overdue
support owed by an absent parent to any consumer reporting agency as
specified in section 466(a)(7) of the Social Security Act (42 U.S.C.
666(a)(7));
`(B) the interception of tax refunds, as specified in sections 464 and
466(a)(3) of the Social Security Act (42 U.S.C. 664 and 666(a)(3));
or
`(C) the enforcement of medical obligations as specified under title
IV of the Social Security Act (42 U.S.C. 601 et seq.).'.
SEC. 327. NONDISCHARGEABILITY OF CERTAIN DEBTS FOR ALIMONY, MAINTENANCE, AND
SUPPORT.
Section 523 of title 11, United States Code, as amended by section 202 of
this Act, is amended--
(1) in subsection (a), by striking paragraph (5) and inserting the
following:
`(5) for a domestic support obligation;';
(2) in subsection (c), by striking `(6), or (15)' and inserting `or
(6)'; and
(3) in paragraph (15), by striking `governmental unit' and all through
the end of the paragraph and inserting a semicolon.
SEC. 328. CONTINUED LIABILITY OF PROPERTY.
Section 522 of title 11, United States Code, as amended by section 320 of
this Act, is amended--
(1) in subsection (c), by striking paragraph (1) and inserting the
following:
`(1) a debt of a kind specified in paragraph (1) or (5) of section
523(a) (in which case, notwithstanding any provision of applicable
nonbankruptcy law to the contrary, such property shall be liable for a debt
of a kind specified in section 523(a)(5));'; and
(2) in subsection (f)(1)(A), by striking the dash and all that follows
through the end of the subparagraph and inserting `of a kind that is
specified in section 523(a)(5); or'.
SEC. 329. PROTECTION OF DOMESTIC SUPPORT CLAIMS AGAINST PREFERENTIAL
TRANSFER MOTIONS.
Section 547(c) of title 11, United States Code, is amended by striking
paragraph (7) and inserting the following:
`(7) to the extent such transfer was a bona fide payment of a debt for a
domestic support obligation; or'.
SEC. 330. PROTECTION OF RETIREMENT SAVINGS IN BANKRUPTCY.
(a) IN GENERAL- Section 522 of title 11, United States Code, as amended by
section 328 of this Act, is amended--
(i) by striking `(2)(A) subject to subsection (n), any property' and
inserting:
`(3) Subject to subsection (n), property listed in this paragraph is--
(ii) in subparagraph (A), by striking `and' at the end;
(iii) in subparagraph (B), by striking the period at the end and
inserting `; and'; and
(iv) by adding at the end the following:
`(C) retirement funds to the extent that those funds are in a fund or
account that is exempt from taxation under section 401, 403, 408, 408A, 414,
457, or 501(a) of the Internal Revenue Code of 1986 and which has not been
pledged or promised to any person in connection with any extension of
credit.';
(B) by striking paragraph (1) and inserting:
`(2) Property listed in this paragraph is property that is specified under
subsection (d) of this section, unless the State law that is applicable to the
debtor under paragraph (3)(A) of this subsection specifically does not so
authorize.';
(C) in the matter preceding paragraph (2)--
(i) by striking `(b)' and inserting `(b)(1)';
(ii) by striking `paragraph (2)' both places it appears and
inserting `paragraph (3)';
(iii) by striking `paragraph (1)' each place it appears and
inserting `paragraph (2)'; and
(iv) by striking `Such property is--'; and
(D) by adding at the end of the subsection the following:
`(4) For purposes of paragraph (3)(C), the following shall apply:
`(A) If the retirement funds are in a retirement fund that has received
a favorable determination pursuant to section 7805 of the Internal Revenue
Code of 1986, and that determination is in effect as of the date of the
commencement of the case under section 301, 302, or 303, those funds shall
be presumed to be exempt from the estate.
`(B) If the retirement funds are in a retirement fund that has not
received a favorable determination pursuant to such section 7805, those
funds are exempt from the estate if the debtor demonstrates that--
`(i) no prior determination to the contrary has been made by a court
or the Internal Revenue Service; and
`(ii)(I) the retirement fund is in substantial compliance with the
applicable requirements of the Internal Revenue Code of 1986; or
`(II) the retirement fund fails to be in substantial compliance with
such applicable requirements, the debtor is not materially responsible for
that failure.
`(C) A direct transfer of retirement funds from 1 fund or account that
is exempt from taxation under section 401, 403, 408, 408A, 414, 457, or
501(a) of the Internal Revenue Code of 1986, pursuant to section 401(a)(31)
of the Internal Revenue Code of 1986, or otherwise, shall not cease to
qualify for exemption under paragraph (3)(C) by reason of that direct
transfer.
`(D)(i) Any distribution that qualifies as an eligible rollover
distribution within the meaning of section 402(c) of the Internal Revenue
Code of 1986 or that is described in clause (ii) shall not cease to qualify
for exemption under paragraph (3)(C) by reason of that distribution.
`(ii) A distribution described in this clause is an amount that--
`(I) has been distributed from a fund or account that is exempt from
taxation under section 401, 403, 408, 408A, 414, 457, or 501(a) of the
Internal Revenue Code of 1986; and
`(II) to the extent allowed by law, is deposited in such a fund or
account not later than 60 days after the distribution of that amount.';
and
(A) in the matter preceding paragraph (1), by striking `subsection
(b)(1)' and inserting `subsection (b)(2)'; and
(B) by adding at the end the following:
`(12) Retirement funds to the extent that those funds are in a fund or
account that is exempt from taxation under section 401, 403, 408, 408A, 414,
457, or 501(a) of the Internal Revenue Code of 1986.'.
(b) AUTOMATIC STAY- Section 362(b) of title 11, United States Code, as
amended by section 326 of this Act, is amended--
(1) in paragraph (18), by striking `or' at the end;
(2) in paragraph (19), by striking the period and inserting `;
or';
(3) by inserting after paragraph (19) the following:
`(20) under subsection (a), of withholding of income from a debtor's
wages and collection of amounts withheld, pursuant to the debtor's agreement
authorizing that withholding and collection for the benefit of a pension,
profit-sharing, stock bonus, or other plan established under section 401,
403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986
that is sponsored by the employer of the debtor, or an affiliate, successor,
or predecessor of such employer--
`(A) to the extent that the amounts withheld and collected are used
solely for payments relating to a loan from a plan that satisfies the
requirements of section 408(b)(1) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1108(b)(1)); or
`(B) in the case of a loan from a thrift savings plan described in
subchapter III of title 5, that satisfies the requirements of section
8433(g) of that title.'; and
(4) by adding at the end of the flush material following paragraph (20)
the following: `Paragraph (20) does not apply to any amount owed to a plan
referred to in that paragraph that is incurred under a loan made during the
1-year period preceding the filing of a petition. Nothing in paragraph (20)
may be construed to provide that any loan made under a governmental plan
under section 414(d) of the Internal Revenue Code of 1986 constitutes a
claim or a debt under this title.'.
(c) EXCEPTIONS TO DISCHARGE- Section 523(a) of title 11, United States
Code, as amended by section 202 of this Act, is amended--
(1) by striking `or' at the end of paragraph (17);
(2) by striking the period at the end of paragraph (18) and inserting `;
or'; and
(3) by adding at the end the following:
`(19) owed to a pension, profit-sharing, stock bonus, or other plan
established under section 401, 403, 408, 408A, 414, 457, or 501(c) of the
Internal Revenue Code of 1986, pursuant to--
`(A) a loan permitted under section 408(b)(1) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1108(b)(1)); or
`(B) a loan from the thrift savings plan described in subchapter III
of title 5, that satisfies the requirements of section 8433(g) of that
title.
Paragraph (19) does not apply to any amount owed to a plan referred to in
that paragraph that is incurred under a loan made during the 1-year period
preceding the filing of a petition. Nothing in paragraph (19) may be construed
to provide that any loan made under a governmental plan under section 414(d)
of the Internal Revenue Code of 1986 constitutes a claim or a debt under this
title.'.
(d) PLAN CONTENTS- Section 1322 of title 11, United States Code, is
amended by adding at the end the following:
`(f) A plan may not materially alter the terms of a loan described in
section 362(b)(20).'.
SEC. 331. ADDITIONAL AMENDMENTS TO TITLE 11, UNITED STATES CODE.
(a) Section 507(a) of title 11, United States Code, is amended by
inserting after paragraph (7) the following:
`(8) Eighth, allowed claims for death or personal injuries resulting
from the operation of a motor vehicle or vessel if such operation was
unlawful because the debtor was intoxicated from using alcohol, a drug or
another substance.'.
(b) Section 523(a)(9) of title 11, United States Code, is amended by
inserting `or vessel' after `vehicle'.
SEC. 332. DEBT LIMIT INCREASE.
Section 104(b) of title 11, United States Code, is amended by adding at
the end the following:
`(4) The dollar amount in section 101(18) shall be adjusted at the same
times and in the same manner as the dollar amounts in paragraph (1) of this
subsection, beginning with the adjustment to be made on April 1, 2001.'.
SEC. 333. ELIMINATION OF REQUIREMENT THAT FAMILY FARMER AND SPOUSE RECEIVE
OVER 50 PERCENT OF INCOME FROM FARMING OPERATION IN YEAR PRIOR TO
BANKRUPTCY.
Section 101(18)(A) of title 11, United States Code, is amended by striking
`the taxable year preceding the taxable year' and inserting `at least 1 of the
3 calendar years preceding the year'.
SEC. 334. PROHIBITION OF RETROACTIVE ASSESSMENT OF DISPOSABLE INCOME.
(a) IN GENERAL- Section 1225(b) of title 11, United States Code, is
amended--
(1) by redesignating paragraph (2) as paragraph (3) and by inserting
after paragraph (1) the following:
`(2) The plan shall be confirmed if--
`(A) the plan provides for specific amounts of property to be
distributed on account of allowed unsecured claims as required by paragraph
(1)(B);
`(B) the amounts under subparagraph (A) equal or exceed the debtor's
projected disposable income for the applicable period; and
`(C) the plan meets the requirements for confirmation other than those
of this subsection, the plan shall be confirmed.'.
(b) MODIFICATION OF PLAN- Section 1229 of title 11, United States Code, is
amended by adding at the end the following:
`(d)(1) A modification of the plan under this section may not increase the
amount of payments that were due prior to the date of the order modifying the
plan.
`(2) A modification of the plan under this section to increase payments
based on an increase in the debtor's disposable income may not require
payments to unsecured creditors in any particular month greater than the
debtor's disposable income for that month unless the debtor proposes such a
modification.
`(3) A modification of the plan in the last year of the plan shall not
require payments that would leave the debtor with insufficient funds to carry
on the farming operation after the plan is completed unless the debtor
proposes such a modification.'.
SEC. 335. AMENDMENT TO SECTION 1325 OF TITLE 11, UNITED STATES CODE.
Section 1325(b)(2) of title 11, United States Code, is amended by
inserting `(other than child support payments, foster care payments, or
disability payments for a dependent child made in accordance with applicable
nonbankruptcy law and which is reasonably necessary to be expended)' after
`received by the debtor'.
SEC. 336. PROTECTION OF SAVINGS EARMARKED FOR THE POSTSECONDARY EDUCATION OF
CHILDREN.
Section 541(b) of title 11, United States Code, is amended--
(1) in paragraph (5), by striking `or' at the end;
(2) by redesignating paragraph (5) as paragraph (7); and
(2) by inserting after paragraph (4) the following:
`(5) except as otherwise provided under applicable State law, any funds
placed in a qualified State tuition program (as described in section 529(b)
of the Internal Revenue Code of 1986) at least 180 days before the date of
entry of the order for relief;
`(6) any funds placed in an education individual retirement account (as
defined in section 530(b)(1) of the Internal Revenue Code of 1986) at least
180 days before the date of entry of the order for relief; or'.
TITLE IV--FINANCIAL INSTRUMENTS
SEC. 401. BANKRUPTCY CODE AMENDMENTS.
(a) DEFINITIONS OF FORWARD CONTRACT, REPURCHASE AGREEMENT, SECURITIES
CLEARING AGENCY, SWAP AGREEMENT, COMMODITY CONTRACT, AND SECURITIES CONTRACT-
Title 11, United States Code, is amended--
(i) by striking `means a contract' and inserting
`means--
(ii) by striking `, or any combination thereof or option thereon;'
and inserting `, or any other similar agreement;'; and
(iii) by adding at the end the following:
`(B) a combination of agreements or transactions referred to in
subparagraphs (A) and (C);
`(C) an option to enter into an agreement or transaction referred to
in subparagraph (A) or (B);
`(D) a master netting agreement that provides for an agreement or
transaction referred to in subparagraph (A), (B), or (C), together with
all supplements to such master netting agreement, without regard to
whether such master netting agreement provides for an agreement or
transaction that is not a forward contract under this paragraph, except
that such master netting agreement shall be considered to be a forward
contract under this paragraph only with respect to each agreement or
transaction under such master netting agreement that is referred to in
subparagraph (A), (B), or (C); or
`(E) a security agreement or arrangement, or other credit enhancement,
related to any agreement, a contract, option, or transaction referred to
in subparagraph (A), (B), (C), or (D);';
(B) by striking paragraph (47) and inserting the following:
`(47) `repurchase agreement' and `reverse repurchase agreement'--
`(i) an agreement, including related terms, that provides for the
transfer of--
`(I) a certificate of deposit, mortgage related security (as
defined in section 3 of the Securities Exchange Act of 1934), mortgage
loan, interest in a mortgage related security or mortgage loan,
eligible bankers' acceptance, or qualified foreign government security
(defined for purposes of this paragraph to mean a security that is a
direct obligation of, or that is fully guaranteed by, the central
government of a member of the Organization for Economic Cooperation
and Development); or
`(II) a security that is a direct obligation of, or that is fully
guaranteed by, the United States or an agency of the United States
against the transfer of funds by the transferee of such certificate of
deposit, eligible bankers' acceptance, security, loan, or
interest;
with a simultaneous agreement by such transferee to transfer to the
transferor thereof a certificate of deposit, eligible bankers'
acceptance, security, loan, or interest of the kind described in
subclause (I) or (II), at a date certain that is not later than 1 year
after the date of the transferor's transfer or on demand, against the
transfer of funds;
`(ii) a combination of agreements or transactions referred to in
clauses (i) and (iii);
`(iii) an option to enter into an agreement or transaction referred
to in clause (i) or (ii);
`(iv) a master netting agreement that provides for an agreement or
transaction referred to in clause (i), (ii), or (iii), together with all
supplements to such master netting agreement, without regard to whether
such master netting agreement provides for an agreement or transaction
that is not a repurchase agreement under this subparagraph, except that
such master netting agreement shall be considered to be a repurchase
agreement under this subparagraph only with respect to each agreement or
transaction under such master netting agreement that is referred to in
clause (i), (ii), or (iii); or
`(v) a security agreement or arrangement, or other credit
enhancement, directly pertaining to a contract referred to in clause
(i), (ii), (iii), or (iv); and
`(B) do not include a repurchase obligation under a participation in a
commercial mortgage loan;'; and
(C) by striking paragraph (53B) and inserting the following:
`(53B) `swap agreement'--
`(i) an agreement, including the terms and conditions incorporated
by reference in such agreement, that is--
`(I) an interest rate swap, option, future, or forward agreement,
including a rate floor, rate cap, rate collar, cross-currency rate
swap, and basis swap;
`(II) a spot, same day-tomorrow, tomorrow-next, forward, or other
foreign exchange or precious metals agreement;
`(III) a currency swap, option, future, or forward
agreement;
`(IV) an equity index or an equity swap, option, future, or
forward agreement;
`(V) a debt index or a debt swap, option, future, or forward
agreement;
`(VI) a credit spread or a credit swap, option, future, or forward
agreement; or
`(VII) a commodity index or a commodity swap, option, future, or
forward agreement;
`(ii) an agreement or transaction that is similar to an agreement or
transaction referred to in clause (i) that--
`(I) is currently, or in the future becomes, regularly entered
into in the swap market (including terms and conditions incorporated
by reference therein); and
`(II) is a forward, swap, future, or option on a rate, currency,
commodity, equity security, or other equity instrument, on a debt
security or other debt instrument, or on an economic index or measure
of economic risk or value;
`(iii) a combination of agreements or transactions referred to in
clauses (i) and (ii);
`(iv) an option to enter into an agreement or transaction referred
to in this subparagraph; or
`(v) a master netting agreement that provides for an agreement or
transaction referred to in clause (i), (ii), (iii), or (iv), together
with all supplements to such master netting agreement and without regard
to whether such master netting agreement contains an agreement or
transaction described in any such clause, but only with respect to each
agreement or transaction referred to in any such clause that is under
such master netting agreement; except that
`(B) the definition under subparagraph (A) is applicable for purposes
of this title only, and shall not be construed or applied so as to
challenge or affect the characterization, definition, or treatment of any
swap agreement under any other statute, regulation, or rule, including the
Securities Act of 1933, the Securities Exchange Act of 1934, the Public
Utility Holding Company Act of 1935, the Trust Indenture Act of 1939, the
Investment Company Act of 1940, the Investment Advisers Act of 1940, the
Securities Investor Protection Act of 1970, the Commodity Exchange Act,
and the regulations prescribed by the Securities and Exchange Commission
or the Commodity Futures Trading Commission.';
(2) in section 741, by striking paragraph (7) and inserting the
following:
`(7) `securities contract'--
`(i) a contract for the purchase, sale, or loan of a security, a
certificate of deposit, a mortgage loan or an interest in a mortgage
loan, a group or index of securities, certificates of deposit, or
mortgage loans or interests therein (including an interest therein or
based on the value thereof), or option on any of the foregoing,
including an option to purchase or sell any of the
foregoing;
`(ii) an option entered into on a national securities exchange
relating to foreign currencies;
`(iii) the guarantee by or to a securities clearing agency of a
settlement of cash, securities, certificates of deposit, mortgage loans
or interests therein, group or index of securities, or mortgage loans or
interests therein (including any interest therein or based on the value
thereof), or option on any of the foregoing, including an option to
purchase or sell any of the foregoing;
`(v) any other agreement or transaction that is similar to an
agreement or transaction referred to in this subparagraph;
`(vi) a combination of the agreements or transactions referred to in
this subparagraph;
`(vii) an option to enter into an agreement or transaction referred
to in this subparagraph;
`(viii) a master netting agreement that provides for an agreement or
transaction referred to in clause (i), (ii), (iii), (iv), (v), (vi), or
(vii), together with all supplements to such master netting agreement,
without regard to whether such master netting agreement provides for an
agreement or transaction that is not a securities contract under this
subparagraph, except that such master netting agreement shall be
considered to be a securities contract under this subparagraph only with
respect to each agreement or transaction under such master netting
agreement that is referred to in clause (i), (ii), (iii), (iv), (v),
(vi), or (vii); or
`(ix) a security agreement or arrangement, or other credit
enhancement, related to any agreement or transaction referred to in this
subparagraph; and
`(B) does not include a purchase, sale, or repurchase obligation under
a participation in, or servicing agreement for, a commercial mortgage
loan;'; and
(A) by striking `or' at the end of subparagraph (D); and
(B) by adding at the end the following:
`(F) any other agreement or transaction that is similar to an
agreement or transaction referred to in this paragraph;
`(G) a combination of the agreements or transactions referred to in
this paragraph;
`(H) an option to enter into an agreement or transaction referred to
in this paragraph;
`(I) a master netting agreement that provides for an agreement or
transaction referred to in subparagraph (A), (B), (C), (D), (E), (F), (G),
or (H), together with all supplements to such master netting agreement,
without regard to whether such master netting agreement provides for an
agreement or transaction that is not a commodity contract under this
paragraph, except that such master netting agreement shall be considered
to be a commodity contract under this paragraph only with respect to each
agreement or transaction under such master netting agreement that is
referred to in subparagraph (A), (B), (C), (D), (E), (F), (G), or (H);
or
`(J) a security agreement or arrangement, or other credit enhancement,
related to any agreement or transaction referred to in this
paragraph.'.
(b) DEFINITIONS OF FINANCIAL INSTITUTION, FINANCIAL PARTICIPANT, AND
FORWARD CONTRACT MERCHANT- Section 101 of title 11, United States Code, is
amended--
(1) by striking paragraph (22) and inserting the following:
`(22) `financial institution' means--
`(A) a Federal reserve bank, or an entity that is a commercial or
savings bank, industrial savings bank, savings and loan association, trust
company, or receiver or conservator for such entity; and
`(B) if such Federal reserve bank, receiver, or conservator or entity
is acting as agent or custodian for a customer in connection with a
securities contract, as defined in section 741, such customer;';
(2) by inserting after paragraph (22) the following:
`(22A) `financial participant' means an entity that--
`(A) is a party to a securities contract, commodity contract or
forward contract;
`(B) on the date of the filing of the petition, has 1 or more
agreements or transactions under section 561(a)(2) with the debtor or any
other entity (other than an affiliate) of a total gross dollar value of
not less than $1,000,000,000 in notional or actual principal amount
outstanding on any date during the previous 15-month period; or
`(C) has gross mark-to-market positions of not less than $100,000,000
(aggregated across counterparties) in an agreement or transaction under
subparagraph (A) with the debtor or any other entity (other than an
affiliate) on any date during the previous 15-month period;'; and
(3) by striking paragraph (26) and inserting the following:
`(26) `forward contract merchant' means a Federal reserve bank, or an
entity, the business of which consists in whole or in part of entering into
forward contracts as or with merchants or in a commodity, as defined or in
section 761, or any similar good, article, service, right, or interest that
is presently or in the future becomes the subject of dealing or in the
forward contract trade;'.
(c) DEFINITION OF MASTER NETTING AGREEMENT AND MASTER NETTING AGREEMENT
PARTICIPANT- Section 101 of title 11, United States Code, is amended by
inserting after paragraph (38) the following new paragraphs:
`(38A) the term `master netting agreement'--
`(A) means an agreement providing for the exercise of rights,
including rights of netting, setoff, liquidation, termination,
acceleration, or closeout, under or in connection with 1 or more contracts
that are described in any 1 or more of paragraphs (1) through (5) of
section 561(a), or any security agreement or arrangement or other credit
enhancement related to 1 or more of the foregoing; except that
`(B) if a master netting agreement contains provisions relating to
agreements or transactions that are not contracts described in paragraphs
(1) through (5) of section 561(a), the master netting agreement shall be
deemed to be a master netting agreement only with respect to those
agreements or transactions that are described in any 1 or more of
paragraphs (1) through (5) of section 561(a); and
`(38B) the term `master netting agreement participant' means an entity
that, at any time before the filing of the petition, is a party to an
outstanding master netting agreement with the debtor;'.
(d) SWAP AGREEMENTS, SECURITIES CONTRACTS, COMMODITY CONTRACTS, FORWARD
CONTRACTS, REPURCHASE AGREEMENTS, AND MASTER NETTING AGREEMENTS UNDER THE
AUTOMATIC STAY-
(1) IN GENERAL- Section 362(b) of title 11, United States Code, as
amended by section 330 of this Act, is amended--
(A) in paragraph (6), by inserting `, pledged to, and under the
control of,' after `held by';
(B) in paragraph (7), by inserting `, pledged to, and under the
control of,' after `held by';
(C) by striking paragraph (17) and inserting the following:
`(17) under subsection (a), of the setoff by a swap participant of a
mutual debt and claim under or in connection with a swap agreement that
constitutes the setoff of a claim against the debtor for a payment or
transfer due from the debtor under or in connection with a swap agreement
against a payment due to the debtor from the swap participant under or in
connection with a swap agreement or against cash, securities, or other
property held by, pledged to, and under the control of, or due from
such swap participant to guarantee, secure, or settle a swap agreement;';
(D) in paragraph (19), by striking `or' at the end;
(E) in paragraph (20), by striking the period at the end and inserting
`; or'; and
(F) by inserting after paragraph (20) the following:
`(21) under subsection (a), of the setoff by a master netting agreement
participant of a mutual debt and claim, to the extent such participant is
eligible to exercise such offset rights under paragraph (6), (7), or (17)
for each individual contract covered by the master netting agreement in
issue.'.
(2) LIMITATION- Section 362 of title 11, United States Code, as amended
by section 432(2) of this Act, is amended by adding at the end the
following:
`(i) The exercise of rights not subject to the stay arising under
subsection (a) pursuant to paragraph (6), (7), or (17) of subsection (b) shall
not be stayed by an order of a court or administrative agency in any
proceeding under this title.'.
(e) LIMITATION OF AVOIDANCE POWERS UNDER MASTER NETTING AGREEMENT- Section
546 of title 11, United States Code, is amended--
(1) in subsection (g), (as added by section 103 of Public Law 101-311
(104 Stat. 267 et seq.))--
(A) by striking `under a swap agreement'; and
(B) by striking `in connection with a swap agreement' and inserting
`under or in connection with any swap agreement'; and
(2) by inserting before subsection (i) (as redesignated by section 407
of this Act) the following new subsection:
`(h) Notwithstanding sections 544, 545, 547, 548(a)(2)(B), and 548(b), the
trustee may not avoid a transfer made by or to a master netting agreement
participant under or in connection with any master netting agreement or any
individual contract covered thereby that is made before the commencement of
the case, and except to the extent that the trustee could otherwise avoid such
a transfer made under an individual contract covered by such master netting
agreement (except under section 548(a)(1)(A)).'.
(f) FRAUDULENT TRANSFERS OF MASTER NETTING AGREEMENTS- Section 548(d)(2)
of title 11, United States Code, is amended--
(1) in subparagraph (C), by striking `and';
(2) in subparagraph (D), by striking the period at the end and inserting
`; and'; and
(3) by adding at the end the following new subparagraph:
`(E) a master netting agreement participant that receives a transfer
in connection with a master netting agreement or any individual contract
covered thereby takes for value to the extent of such transfer, except,
with respect to a transfer under any individual contract covered thereby,
to the extent that such master netting agreement participant otherwise did
not take (or is otherwise not deemed to have taken) such transfer for
value.'.
(g) TERMINATION OR ACCELERATION OF SECURITIES CONTRACTS- Section 555 of
title 11, United States Code, is amended--
(1) by striking the section heading and inserting the following:
`Sec. 555. Contractual right to liquidate, terminate, or accelerate a
securities contract';
(2) in the first sentence, by striking `liquidation' and inserting
`liquidation, termination, or acceleration'.
(h) TERMINATION OR ACCELERATION OF COMMODITIES OR FORWARD CONTRACTS-
Section 556 of title 11, United States Code, is amended--
(1) by striking the section heading and inserting the following:
`Sec. 556. Contractual right to liquidate, terminate, or accelerate a
commodities contract or forward contract';
(2) in the first sentence, by striking `liquidation' and inserting
`liquidation, termination, or acceleration'.
(i) TERMINATION OR ACCELERATION OF REPURCHASE AGREEMENTS- Section 559 of
title 11, United States Code, is amended--
(1) by striking the section heading and inserting the following:
`Sec. 559. Contractual right to liquidate, terminate, or accelerate a
repurchase agreement';
(2) in the first sentence, by striking `liquidation' and inserting
`liquidation, termination, or acceleration'.
(j) LIQUIDATION, TERMINATION, OR ACCELERATION OF SWAP AGREEMENTS- Section
560 of title 11, United States Code, is amended--
(1) by striking the section heading and inserting the following:
`Sec. 560. Contractual right to liquidate, terminate, or accelerate a swap
agreement';
(2) in the first sentence, by striking `termination of a swap agreement'
and inserting `liquidation, termination, or acceleration of a swap
agreement'; and
(3) by striking `in connection with any swap agreement' and inserting
`in connection with the termination, liquidation, or acceleration of a swap
agreement'.
(k) LIQUIDATION, TERMINATION, ACCELERATION, OR OFFSET UNDER A MASTER
NETTING AGREEMENT AND ACROSS CONTRACTS- Title 11, United States Code, is
amended by inserting after section 560 the following new section:
`Sec. 561. Contractual right to terminate, liquidate, accelerate, or offset
under a master netting agreement and across contracts
`(a) Subject to subsection (b), the exercise of any contractual right,
because of a condition of the kind specified in section 365(e)(1), to cause
the termination, liquidation, or acceleration of or to offset or net
termination values, payment amounts or other transfer obligations arising
under or in connection with 1 or more (or the termination, liquidation, or
acceleration of 1 or more)--
`(1) securities contracts, as defined in section 741(7);
`(2) commodity contracts, as defined in section 761(4);
`(4) repurchase agreements;
`(6) master netting agreements,
shall not be stayed, avoided, or otherwise limited by operation of any
provision of this title or by any order of a court or administrative agency in
any proceeding under this title.
`(b)(1) A party may exercise a contractual right described in subsection
(a) to terminate, liquidate, or accelerate only to the extent that such party
could exercise such a right under section 555, 556, 559, or 560 for each
individual contract covered by the master netting agreement in issue.
`(2)(A) A party may not exercise a contractual right described in
subsection (a) to offset or to net obligations arising under, or in connection
with, a commodity contract against obligations arising under, or in connection
with, any instrument listed in subsection (a), if the obligations are not
mutual.
`(B) If a debtor is a commodity broker subject to subchapter IV of chapter
7,a party may not net or offset an obligation to the debtor arising under, or
in connection with, a commodity contract against any claim arising under, or
in connection with, other instruments if that party has no positive net equity
in the commodity account of the debtor, as calculated under subchapter IV.
`(c) As used in this section, the term `contractual right' includes a
right set forth in a rule or bylaw of a national securities exchange, a
national securities association, or a securities clearing agency, a right set
forth in a bylaw of a clearing organization or contract market or in a
resolution of the governing board thereof, and a right, whether or not
evidenced in writing, arising under common law, under law merchant, or by
reason of normal business practice.'.
(l) MUNICIPAL BANKRUPTCIES- Section 901 of title 11, United
States Code, is amended--
(1) by inserting `, 555, 556' after `553'; and
(2) by inserting `, 559, 560, 561, 562,' after `557'.
(m) ANCILLARY PROCEEDINGS- Section 304 of title 11, United States Code, is
amended by adding at the end the following:
`(d) Any provisions of this title relating to securities contracts,
commodity contracts, forward contracts, repurchase agreements, swap
agreements, or master netting agreements shall apply in a case ancillary to a
foreign proceeding under this section or any other section of this title, so
that enforcement of contractual provisions of such contracts and agreements in
accordance with their terms--
`(1) shall not be stayed or otherwise limited by--
`(A) operation of any provision of this title; or
`(B) order of a court in any case under this title;
`(2) shall limit avoidance powers to the same extent as in a proceeding
under chapter 7 or 11; and
`(3) shall not be limited based on the presence or absence of assets of
the debtor in the United States.'.
(n) COMMODITY BROKER LIQUIDATIONS- Title 11, United States Code, is
amended by inserting after section 766 the following:
`Sec. 767. Commodity broker liquidation and forward contract merchants,
commodity brokers, stockbrokers, financial institutions, securities clearing
agencies, swap participants, repo participants, and master netting agreement
participants
`Notwithstanding any other provision of this title, the exercise of rights
by a forward contract merchant, commodity broker, stockbroker, financial
institution, securities clearing agency, swap participant, repo participant,
or master netting agreement participant under this title shall not affect the
priority of any unsecured claim it may have after the exercise of such rights
or affect any provision of this subchapter relating to customer property or
distributions.'.
(o) STOCKBROKER LIQUIDATIONS- Title 11, United States Code, is amended by
inserting after section 752 the following:
`Sec. 753. Stockbroker liquidation and forward contract merchants, commodity
brokers, stockbrokers, financial institutions, securities clearing agencies,
swap participants, repo participants, and master netting agreement
participants
`Notwithstanding any other provision of this title, the exercise of rights
by a forward contract merchant, commodity broker, stockbroker, financial
institution, securities clearing agency, swap participant, repo participant,
or master netting agreement participant under this title shall not affect the
priority of any unsecured claim it may have after the exercise of rights or
affect any provision of this subchapter relating to customer property or
distributions.'.
(p) SETOFF- Section 553 of title 11, United States Code, is amended--
(1) in subsection (a)(3)(C), by inserting `(except for a setoff of a
kind described in section 362(b)(6), 362(b)(7), 362(b)(17), 362(b)(21), 555,
556, 559, 560, or 561)' before the period; and
(2) in subsection (b)(1), by striking `362(b)(14),' and inserting
`362(b)(17), 362(b)(21), 555, 556, 559, 560,'.
(q) SECURITIES CONTRACTS, COMMODITY CONTRACTS, AND FORWARD CONTRACTS-
Title 11, United States Code, is amended--
(1) in section 362(b)(6), by striking `financial institutions,' each
place such term appears and inserting `financial institution, financial
participant';
(2) in section 546(e), by inserting `financial participant' after
`financial institution,';
(3) in section 548(d)(2)(B), by inserting `financial participant' after
`financial institution,';
(A) by inserting `financial participant' after `financial
institution,'; and
(B) by inserting before the period `, a right set forth in a bylaw of
a clearing organization or contract market or in a resolution of the
governing board thereof, and a right, whether or not in writing, arising
under common law, under law merchant, or by reason of normal business
practice'; and
(5) in section 556, by inserting `, financial participant' after
`commodity broker'.
(r) TECHNICAL AND CONFORMING AMENDMENT- Section 104 of title 11, United
States Code, is amended by adding at the end the following:
`(c) EXCEPTION FOR CERTAIN DEFINED TERMS- No adjustments shall be made
under this section to the dollar amounts set forth in the definition of the
term `financial participant' in section 101 (22A).'.
(s) CONFORMING AMENDMENTS- Title 11 of the United States Code is
amended--
(1) in the table of sections for chapter 5--
(A) by striking the items relating to sections 555 and 556 and
inserting the following:
`555. Contractual right to liquidate, terminate, or accelerate a
securities contract.
`556. Contractual right to liquidate, terminate, or accelerate a
commodities contract or forward contract.';
(B) by striking the items relating to sections 559 and 560 and
inserting the following:
`559. Contractual right to liquidate, terminate, or accelerate a
repurchase agreement.
`560. Contractual right to liquidate, terminate, or accelerate a swap
agreement.';
(C) by adding after the item relating to section 560 the
following:
`561. Contractual right to terminate, liquidate, accelerate, or offset
under a master netting agreement and across contracts.';
(2) in the table of sections for chapter 7--
(A) by inserting after the item relating to section 766 the
following:
`767. Commodity broker liquidation and forward contract merchants,
commodity brokers, stockbrokers, financial institutions, securities clearing
agencies, swap participants, repo participants, and master netting agreement
participants.';
(B) by inserting after the item relating to section 752 the
following:
`753. Stockbroker liquidation and forward contract merchants, commodity
brokers, stockbrokers, financial institutions, securities clearing agencies,
swap participants, repo participants, and master netting agreement
participants.'.
SEC. 402. DAMAGE MEASURE.
(a) IN GENERAL- Title 11, United States Code, is amended by inserting
after section 561 (as added by section 401(b)) the following:
`Sec. 562. Damage measure in connection with swap agreements, securities
contracts, forward contracts, commodity contracts, repurchase agreements, or
master netting agreements
`If the trustee rejects a swap agreement, securities contract as defined
in section 741, forward contract, repurchase agreement, or master netting
agreement pursuant to section 365(a), or if a forward contract merchant,
stockbroker, financial institution, securities clearing agency, repo
participant, master netting agreement participant, or swap participant
liquidates, terminates, or accelerates any such contract or agreement, damages
shall be measured as of the earlier of--
`(1) the date of such rejection; or
`(2) the date of such liquidation, termination, or acceleration.'.
(b) CLAIMS ARISING FROM REJECTION- Section 502(g) of title 11, United
States Code, is amended--
(1) by designating the existing text as paragraph (1); and
(2) by adding at the end the following new paragraph:
`(2) A claim for damages calculated in accordance with section 562 shall
be allowed under subsection (a), (b), or (c) of this section or disallowed
under subsection (d) or (e) of this section as if such claim had arisen
before the date of the filing of the petition.'.
SEC. 403. ASSET-BACKED SECURITIZATIONS.
Section 541 of title 11, United States Code, as amended by section 336 of
this Act, is amended--
(A) by striking `or' at the end of paragraph (6); and
(B) by redesignating paragraph (7) as paragraph (8);
(2) by inserting after paragraph (6) the following:
`(7) any eligible asset (or proceeds thereof), to the extent that such
eligible asset was transferred by the debtor, before the date of
commencement of the case, to an eligible entity in connection with an
asset-backed securitization, except to the extent such asset (or proceeds or
value thereof) may be recovered by the trustee under section 550 by reason
of avoidance under section 548(a); or'; and
(3) by adding at the end the following new subsection:
`(1) The term `asset-backed securitization' means a transaction in which
eligible assets transferred to an eligible entity are used as the source of
payment on securities, the most senior of which are rated investment grade
by 1 or more nationally recognized securities rating organizations, issued
by an issuer.
`(2) The term `eligible asset' means--
`(A) financial assets (including interests therein and proceeds
thereof), either fixed or revolving, including residential and commercial
mortgage loans, consumer receivables, trade receivables, and lease
receivables, that, by their terms, convert into cash within a finite time
period, plus any rights or other assets designed to assure the servicing
or timely distribution of proceeds to security holders;
`(3) The term `eligible entity' means--
`(B) a trust, corporation, partnership, or other entity engaged
exclusively in the business of acquiring and transferring eligible assets
directly or indirectly to an issuer and taking actions ancillary
thereto.
`(4) The term `issuer' means a trust, corporation, partnership, or other
entity engaged exclusively in the business of acquiring and holding eligible
assets, issuing securities backed by eligible assets, and taking actions
ancillary thereto.
`(5) The term `transferred' means, with respect to a debtor, that the
debtor, under a written agreement, represented and warranted that eligible
assets were sold, contributed, or otherwise conveyed with the intention of
removing them from the estate of the debtor pursuant to subsection (b)(5),
without regard to--
`(A) whether the debtor directly or indirectly obtained or held an
interest in the issuer or in any securities issued by the issuer;
`(B) whether the debtor had an obligation to repurchase or to service
or supervise the servicing of all or any portion of such eligible assets;
or
`(C) the characterization of such sale, contribution, or other
conveyance for tax, accounting, regulatory reporting, or other
purposes.'.
SEC. 404. PROHIBITION ON CERTAIN ACTIONS FOR FAILURE TO INCUR FINANCE
CHARGES.
Section 106 of the Truth in Lending Act (15 U.S.C. 1605) is amended by
adding at the end the following:
`(g) PROHIBITION ON CERTAIN ACTIONS FOR FAILURE TO INCUR FINANCE CHARGES-
A creditor may not, solely because a consumer has not incurred finance charges
in connection with an extension of credit--
`(1) refuse to renew or continue to offer the extension of credit to
that consumer; or
`(2) charge a fee to that consumer in lieu of a finance charge.'.
SEC. 405. FEES ARISING FROM CERTAIN OWNERSHIP INTERESTS.
Section 523(a)(16) of title 11, United States Code, is amended--
(1) by striking `dwelling' the first place it appears;
(2) by striking `ownership or' and inserting `ownership,';
(3) by striking `housing' the first place it appears; and
(4) by striking `but only' and all that follows through `such period,',
and inserting `or a lot in a homeowners association, for as long as the
debtor or the trustee has a legal, equitable, or possessory ownership
interest in such unit, such corporation, or such lot,'.
SEC. 406. BANKRUPTCY FEES.
Section 1930 of title 28, United States Code, is amended--
(1) in subsection (a), by striking `Notwithstanding section 1915, the
parties' and inserting `Subject to subsection (f), the parties'; and
(2) by adding at the end the following:
`(f)(1) The Judicial Conference of the United States shall prescribe
procedures for waiving fees under this subsection.
`(2) Under the procedures described in paragraph (1), the district court
or the bankruptcy court may waive a filing fee described in paragraph (3) for
a case commenced under chapter 7 of title 11 if the court determines that an
individual debtor is unable to pay that fee in installments.
`(3) A filing fee referred to in paragraph (2) is--
`(A) a filing fee under subsection (a)(1); or
`(B) any other fee prescribed by the Judicial Conference of the United
States under subsection (b) that is payable to the clerk of the district
court or the clerk of the bankruptcy court upon the commencement of a case
under chapter 7 of title 11.
`(4) In addition to waiving a fee described in paragraph (3) under
paragraph (2), the district court or the bankruptcy court may waive any other
fee prescribed under subsection (b) or (c) if the court determines that the
individual is unable to pay that fee in installments.'.
SEC. 407. APPLICABILITY.
The amendments made by this title shall apply with respect to cases
commenced or appointments made under any Federal or State law after the date
of enactment of this Act.
TITLE V--ANCILLARY AND OTHER CROSS-BORDER CASES
SEC. 501. AMENDMENT TO ADD CHAPTER 6 TO TITLE 11, UNITED STATES CODE.
(a) IN GENERAL- Title 11, United States Code, is amended by inserting
after chapter 5 the following:
`CHAPTER 6--ANCILLARY AND OTHER CROSS-BORDER CASES
`Sec.
`601. Purpose and scope of application.
`SUBCHAPTER I--GENERAL PROVISIONS
`603. International obligations of the United States.
`604. Commencement of ancillary case.
`605. Authorization to act in a foreign country.
`606. Public policy exception.
`607. Additional assistance.
`SUBCHAPTER II--ACCESS OF FOREIGN REPRESENTATIVES AND CREDITORS TO THE
COURT
`609. Right of direct access.
`610. Limited jurisdiction.
`611. Commencement of case under section 301 or 303.
`612. Participation of a foreign representative in a case under this
title.
`613. Access of foreign creditors to a case under this title.
`614. Notification to foreign creditors concerning a case under this
title.
`SUBCHAPTER III--RECOGNITION OF A FOREIGN PROCEEDING AND RELIEF
`615. Application for recognition of a foreign proceeding.
`616. Presumptions concerning recognition.
`617. Order recognizing a foreign proceeding.
`618. Subsequent information.
`619. Relief that may be granted upon petition for recognition of a
foreign proceeding.
`620. Effects of recognition of a foreign main proceeding.
`621. Relief that may be granted upon recognition of a foreign
proceeding.
`622. Protection of creditors and other interested persons.
`623. Actions to avoid acts detrimental to creditors.
`624. Intervention by a foreign representative.
`SUBCHAPTER IV--COOPERATION WITH FOREIGN COURTS AND FOREIGN
REPRESENTATIVES
`625. Cooperation and direct communication between the court and foreign
courts or foreign representatives.
`626. Cooperation and direct communication between the trustee and
foreign courts or foreign representatives.
`627. Forms of cooperation.
`SUBCHAPTER V--CONCURRENT PROCEEDINGS
`628. Commencement of a case under this title after recognition of a
foreign main proceeding.
`629. Coordination of a case under this title and a foreign
proceeding.
`630. Coordination of more than 1 foreign proceeding.
`631. Presumption of insolvency based on recognition of a foreign main
proceeding.
`632. Rule of payment in concurrent proceedings.
`Sec. 601. Purpose and scope of application
`(a) The purpose of this chapter is to incorporate the Model Law on
Cross-Border Insolvency so as to provide effective mechanisms for dealing with
cases of cross-border insolvency with the objectives of--
`(1) cooperation between--
`(A) United States courts, United States trustees, trustees,
examiners, debtors, and debtors in possession; and
`(B) the courts and other competent authorities of foreign countries
involved in cross-border insolvency cases;
`(2) greater legal certainty for trade and investment;
`(3) fair and efficient administration of cross-border insolvencies that
protects the interests of all creditors, and other interested entities,
including the debtor;
`(4) protection and maximization of the value of the debtor's assets;
and
`(5) facilitation of the rescue of financially troubled businesses,
thereby protecting investment and preserving employment.
`(b) This chapter applies if--
`(1) assistance is sought in the United States by a foreign court or a
foreign representative in connection with a foreign proceeding;
`(2) assistance is sought in a foreign country in connection with a case
under this title;
`(3) a foreign proceeding and a case under this title with respect to
the same debtor are taking place concurrently; or
`(4) creditors or other interested persons in a foreign country have an
interest in requesting the commencement of, or participating in, a case or
proceeding under this title.
`(c) This chapter does not apply to--
`(1) a proceeding concerning an entity identified by exclusion in
subsection 109(b); or
`(2) an individual, or to an individual and such individual's spouse,
who have debts within the limits specified in section 109(e) and who are
citizens of the United States or aliens lawfully admitted for permanent
residence in the United States.
`SUBCHAPTER I--GENERAL PROVISIONS
`Sec. 602. Definitions
`For purposes of this chapter, the term--
`(1) `debtor' means an entity that is the subject of a foreign
proceeding;
`(2) `establishment' means any place of operations where the debtor
carries out a nontransitory economic activity;
`(3) `foreign court' means a judicial or other authority competent to
control or supervise a foreign proceeding;
`(4) `foreign main proceeding' means a foreign proceeding taking place
in the country where the debtor has the center of its main interests;
`(5) `foreign nonmain proceeding' means a foreign proceeding, other than
a foreign main proceeding, taking place in a country where the debtor has an
establishment;
`(6) `trustee' includes a trustee, a debtor in possession in a case
under any chapter of this title, or a debtor under chapter 9 or 13 of this
title; and
`(7) `within the territorial jurisdiction of the United States' when
used with reference to property of a debtor refers to tangible property
located within the territory of the United States and intangible property
deemed to be located within that territory, including any property that may
properly be seized or garnished by an action in a Federal or State court in
the United States.
`Sec. 603. International obligations of the United States
`To the extent that this chapter conflicts with an obligation of the
United States arising out of any treaty or other form of agreement to which it
is a party with 1 or more other countries, the requirements of the treaty or
agreement prevail.
`Sec. 604. Commencement of ancillary case
`A case under this chapter is commenced by the filing of a petition for
recognition of a foreign proceeding under section 615.
`Sec. 605. Authorization to act in a foreign country
`A trustee or another entity designated by the court, may be authorized by
the court to act in a foreign country on behalf of an estate created under
section 541. An entity authorized to act under this section may act in any way
permitted by the applicable foreign law.
`Sec. 606. Public policy exception
`Nothing in this chapter prevents the court from refusing to take an
action governed by this chapter if the action would be manifestly contrary to
the public policy of the United States.
`Sec. 607. Additional assistance
`(a) Nothing in this chapter limits the power of the court, upon
recognition of a foreign proceeding, to provide additional assistance to a
foreign representative under this title or under other laws of the United
States.
`(b) In determining whether to provide additional assistance under this
title or under other laws of the United States, the court shall consider
whether such additional assistance, consistent with the principles of comity,
will reasonably assure--
`(1) just treatment of all holders of claims against or interests in the
debtor's property;
`(2) protection of claim holders in the United States against prejudice
and inconvenience in the processing of claims in such foreign
proceeding;
`(3) prevention of preferential or fraudulent dispositions of property
of the debtor;
`(4) distribution of proceeds of the debtor's property substantially in
accordance with the order prescribed by this title; and
`(5) if appropriate, the provision of an opportunity for a fresh start
for the individual that such foreign proceeding concerns.
`Sec. 608. Interpretation
`In interpreting this chapter, the court shall consider its international
origin, and the need to promote an application of this chapter that is
consistent with the application of similar statutes adopted by foreign
jurisdictions.
`SUBCHAPTER II--ACCESS OF FOREIGN REPRESENTATIVES AND CREDITORS TO THE
COURT
`Sec. 609. Right of direct access
`(a) A foreign representative is entitled to commence a case under section
604 by filing a petition for recognition under section 615, and upon
recognition, to apply directly to other Federal and State courts for
appropriate relief in those courts.
`(b) Upon recognition, and subject to section 610, a foreign
representative shall have the capacity to sue and be sued.
`(c) Recognition under this chapter is prerequisite to the granting of
comity or cooperation to a foreign representative in any Federal or State
court in the United States. Any request for comity or cooperation by a foreign
representative in any court shall be accompanied by a sworn statement setting
forth whether recognition under section 615 has been sought and the status of
any such petition.
`(d) Upon denial of recognition under this chapter, the court may issue
appropriate orders necessary to prevent an attempt to obtain comity or
cooperation from courts in the United States without such recognition.
`Sec. 610. Limited jurisdiction
`The sole fact that a foreign representative files a petition under
sections 604 and 615 does not subject the foreign representative to the
jurisdiction of any court in the United States for any other purpose.
`Sec. 611. Commencement of case under section 301 or 303
`(a) Upon filing a petition for recognition, a foreign representative may
commence--
`(1) an involuntary case under section 303; or
`(2) a voluntary case under section 301 or 302, if the foreign
proceeding is a foreign main proceeding.
`(b) The petition commencing a case under subsection (a) must be
accompanied by a statement describing the petition for recognition and its
current status. The court where the petition for recognition has been filed
must be advised of the foreign representative's intent to commence a case
under subsection (a) prior to such commencement.
`(c) A case under subsection (a) shall be dismissed unless recognition is
granted.
`Sec. 612. Participation of a foreign representative in a case under this
title
`Upon recognition of a foreign proceeding, the foreign representative in
that proceeding is entitled to participate as a party in interest in a case
regarding the debtor under this title.
`Sec. 613. Access of foreign creditors to a case under this title
`(a) Foreign creditors have the same rights regarding the commencement of,
and participation in, a case under this title as domestic creditors.
`(b)(1) Subsection (a) does not change or codify law in effect on the date
of enactment of this chapter as to the priority of claims under section 507 or
726, except that the claim of a foreign creditor under section 507 or 726
shall not be given a lower priority than that of general unsecured claims
without priority solely because the holder of such claim is a foreign
creditor.
`(2)(A) Subsection (a) and paragraph (1) do not change or codify law in
effect on the date of enactment of this chapter as to the allowability of
foreign revenue claims or other foreign public law claims in a proceeding
under this title.
`(B) Allowance and priority as to a foreign tax claim or other foreign
public law claim shall be governed by any applicable tax treaty of the United
States, under the conditions and circumstances specified therein.
`Sec. 614. Notification to foreign creditors concerning a case under this
title
`(a) Whenever in a case under this title notice is to be given to
creditors generally or to any class or category of creditors, such notice
shall also be given to the known creditors generally, or to creditors in the
notified class or category, that do not have addresses in the United States.
The court may order that appropriate steps be taken with a view to notifying
any creditor whose address is not yet known.
`(b) The notification to creditors with foreign addresses described in
subsection (a) shall be given individually, unless the court considers that,
under the circumstances, some other form of notification would be more
appropriate. No letters rogatory or other similar formality is required.
`(c) When a notification of commencement of a case is to be given to
foreign creditors, the notification shall--
`(1) indicate the time period for filing proofs of claim and specify the
place for their filing;
`(2) indicate whether secured creditors need to file their proofs of
claim; and
`(3) contain any other information required to be included in such a
notification to creditors pursuant to this title and the orders of the
court.
`(d) Any rule of procedure or order of the court as to notice or the
filing of a claim shall provide such additional time to creditors with foreign
addresses as is reasonable under the circumstances.
`SUBCHAPTER III--RECOGNITION OF A FOREIGN PROCEEDING AND RELIEF
`Sec. 615. Application for recognition of a foreign proceeding
`(a) A foreign representative applies to the court for recognition of the
foreign proceeding in which the foreign representative has been appointed by
filing a petition for recognition.
`(b) A petition for recognition shall be accompanied by--
`(1) a certified copy of the decision commencing the foreign proceeding
and appointing the foreign representative;
`(2) a certificate from the foreign court affirming the existence of the
foreign proceeding and of the appointment of the foreign representative;
or
`(3) in the absence of evidence referred to in paragraphs (1) and (2),
any other evidence acceptable to the court of the existence of the foreign
proceeding and of the appointment of the foreign representative.
`(c) A petition for recognition shall also be accompanied by a statement
identifying all foreign proceedings with respect to the debtor that are known
to the foreign representative.
`(d) The documents referred to in paragraphs (1) and (2) of subsection (b)
must be translated into English. The court may require a translation into
English of additional documents.
`Sec. 616. Presumptions concerning recognition
`(a) If the decision or certificate referred to in section 615(b)
indicates that the foreign proceeding is a foreign proceeding, within the
meaning of section 101(23) and that the person or body is a foreign
representative, within the meaning of section 101(24), the court is entitled
to so presume.
`(b) The court is entitled to presume that documents submitted in support
of the petition for recognition are authentic, whether or not the documents
have been subjected to legal processing under applicable law.
`(c) In the absence of evidence to the contrary, the debtor's registered
office, or habitual residence in the case of an individual, is presumed to be
the center of the debtor's main interests.
`Sec. 617. Order recognizing a foreign proceeding
`(a) Subject to section 606, an order recognizing a foreign proceeding
shall be entered if--
`(1) the foreign proceeding is a foreign main proceeding or foreign
nonmain proceeding within the meaning of section 602 and is a foreign
proceeding within the meaning of section 101(23);
`(2) the person or body applying for recognition is a foreign
representative within the meaning of section 101(24); and
`(3) the petition meets the requirements of section 615.
`(b) The foreign proceeding shall be recognized--
`(1) as a foreign main proceeding if it is taking place in the country
where the debtor has the center of its main interests; or
`(2) as a foreign nonmain proceeding if the debtor has an establishment
within the meaning of section 602 in the foreign country where the
proceeding is pending.
`(c) A petition for recognition of a foreign proceeding shall be decided
upon at the earliest possible time. Entry of an order recognizing a foreign
proceeding shall constitute recognition under this chapter.
`(d) The provisions of this subchapter do not prevent modification or
termination of recognition if it is shown that the grounds for granting it
were fully or partially lacking or have ceased to exist, but in considering
such action the court shall give due weight to possible prejudice to parties
that have relied upon the granting of recognition. The case under this chapter
may be closed in the manner prescribed for a case under section 350.
`Sec. 618. Subsequent information
`After the petition for recognition of the foreign proceeding is filed,
the foreign representative shall file with the court promptly a notice of
change of status concerning--
`(1) any substantial change in the status of the foreign proceeding or
the status of the foreign representative's appointment; and
`(2) any other foreign proceeding regarding the debtor that becomes
known to the foreign representative.
`Sec. 619. Relief that may be granted upon petition for recognition of a
foreign proceeding
`(a) Beginning on the date on which a petition for recognition is filed
and ending on the date on which the petition is decided upon, the court may,
at the request of the foreign representative, if relief is urgently needed to
protect the assets of the debtor or the interests of the creditors, grant
relief of a provisional nature, including--
`(1) staying execution against the debtor's assets;
`(2) entrusting the administration or realization of all or part of the
debtor's assets located in the United States to the foreign representative
or another person, including an examiner, designated by the court, including
an examiner, in order to protect and preserve the value of assets that, by
their nature or because of other circumstances, are perishable, susceptible
to devaluation, or otherwise in jeopardy; and
`(3) any relief referred to in paragraph (3), (4), or (7) of section
621(a).
`(b) Unless extended under section 621(a)(6), the relief granted under
this section terminates when the petition for recognition is decided upon.
`(c) It is a ground for denial of relief under this section that such
relief would interfere with the administration of a foreign main
proceeding.
`(d) The court may not enjoin a police or regulatory act of a governmental
unit, including a criminal action or proceeding, under this section.
`(e) The standards, procedures, and limitations applicable to an
injunction shall apply to relief under this section.
`Sec. 620. Effects of recognition of a foreign main proceeding
`(a)(1) Upon recognition of a foreign proceeding that is a foreign main
proceeding--
`(A) section 362 applies with respect to the debtor and that property of
the debtor that is within the territorial jurisdiction of the United States;
and
`(B) a transfer, an encumbrance, or any other disposition of an interest
of the debtor in property within the territorial jurisdiction of the United
States is restrained as and to the extent that is provided for property of
an estate under sections 363, 549, and 552.
`(2) Unless the court orders otherwise, the foreign representative may
operate the debtor's business and may exercise the powers of a trustee under
section 549, subject to sections 363 and 552.
`(b) The scope, and the modification or termination, of the stay and
restraints referred to in subsection (a) are subject to the exceptions and
limitations provided in subsections (b), (c), and (d) of section 362,
subsections (b) and (c) of section 363, and sections 552, 555 through 557,
559, and 560.
`(c) Subsection (a) does not affect the right to commence individual
actions or proceedings in a foreign country to the extent necessary to
preserve a claim against the debtor.
`(d) Subsection (a) does not affect the right of a foreign representative
or an entity to file a petition commencing a case under this title or the
right of any party to file claims or take other proper actions in such a
case.
`Sec. 621. Relief that may be granted upon recognition of a foreign
proceeding
`(a) Upon recognition of a foreign proceeding, whether main or nonmain, if
necessary to effectuate the purpose of this chapter and to protect the assets
of the debtor or the interests of the creditors, the court may, at the request
of the foreign representative, grant any appropriate relief, including--
`(1) staying the commencement or continuation of individual actions or
individual proceedings concerning the debtor's assets, rights, obligations,
or liabilities to the extent the actions or proceedings have not been stayed
under section 620(a);
`(2) staying execution against the debtor's assets to the extent the
execution has not been stayed under section 620(a);
`(3) suspending the right to transfer, encumber, or otherwise dispose of
any assets of the debtor to the extent that right has not been suspended
under section 620(a);
`(4) providing for the examination of witnesses, the taking of evidence,
or the delivery of information concerning the debtor's assets, affairs,
rights, obligations, or liabilities;
`(5) entrusting the administration or realization of all or part of the
debtor's assets within the territorial jurisdiction of the United States to
the foreign representative or another person, including an examiner,
designated by the court;
`(6) extending relief granted under section 619(a); and
`(7) granting any additional relief that may be available to a trustee,
except for relief available under sections 522, 544, 545, 547, 548, 550, and
724(a).
`(b) Upon recognition of a foreign proceeding, whether main or nonmain,
the court may, at the request of the foreign representative, entrust the
distribution of all or part of the debtor's assets located in the United
States to the foreign representative or another person, including an examiner,
designated by the court, if the court is satisfied that the interests of
creditors in the United States are sufficiently protected.
`(c) In granting relief under this section to a representative of a
foreign nonmain proceeding, the court must be satisfied that the relief
relates to assets that, under the laws of the United States, should be
administered in the foreign nonmain proceeding or concerns information
required in that proceeding.
`(d) The court may not enjoin a police or regulatory act of a governmental
unit, including a criminal action or proceeding, under this section.
`Sec. 622. Protection of creditors and other interested persons
`(a) The court may grant relief under section 619 or 621, or may modify or
terminate relief under subsection (c), only if the court finds that the
interests of the creditors and other interested entities, including the
debtor, are sufficiently protected.
`(b) The court may subject relief granted under section 619 or 621 to
conditions that the court considers to be appropriate.
`(c) The court may, at the request of the foreign representative or an
entity affected by relief granted under section 619 or 621, or at its own
motion, modify or terminate the relief.
`Sec. 623. Actions to avoid acts detrimental to creditors
`(a) Upon recognition of a foreign proceeding, the foreign representative
has standing in a case concerning the debtor pending under another chapter of
this title to initiate actions under sections 522, 544, 545, 547, 548, 550,
and 724(a).
`(b) In any case in which the foreign proceeding is a foreign nonmain
proceeding, the court must be satisfied that an action under subsection (a)
relates to assets that, under United States law, should be administered in the
foreign nonmain proceeding.
`Sec. 624. Intervention by a foreign representative
`Upon recognition of a foreign proceeding, the foreign representative may
intervene in any proceedings in a Federal or State court in the United States
in which the debtor is a party.
`SUBCHAPTER IV--COOPERATION WITH FOREIGN COURTS AND FOREIGN
REPRESENTATIVES
`Sec. 625. Cooperation and direct communication between the court and
foreign courts or foreign representatives
`(a) In all matters included within section 601, the court shall cooperate
to the maximum extent possible with foreign courts or foreign representatives,
either directly or through the trustee.
`(b) The court is entitled to communicate directly with, or to request
information or assistance directly from, foreign courts or foreign
representatives, subject to the rights of parties in interest to notice and
participation.
`Sec. 626. Cooperation and direct communication between the trustee and
foreign courts or foreign representatives
`(a) In all matters included within section 601, the trustee or other
person, including an examiner, designated by the court, shall, subject to the
supervision of the court, cooperate to the maximum extent possible with
foreign courts or foreign representatives.
`(b) The trustee or other person, including an examiner, designated by the
court is entitled, subject to the supervision of the court, to communicate
directly with foreign courts or foreign representatives.
`(c) Section 1104(d) shall apply to the appointment of an examiner under
this chapter. Any such examiner shall comply with the qualifications
requirements imposed on a trustee under section 322(a).
`Sec. 627. Forms of cooperation
`Cooperation referred to in sections 625 and 626 may be implemented by any
appropriate means, including--
`(1) appointment of a person or body, including an examiner, to act at
the direction of the court;
`(2) communication of information by any means considered appropriate by
the court;
`(3) coordination of the administration and supervision of the debtor's
assets and affairs;
`(4) approval or implementation of agreements concerning the
coordination of proceedings; and
`(5) coordination of concurrent proceedings regarding the same
debtor.
`SUBCHAPTER V--CONCURRENT PROCEEDINGS
`Sec. 628. Commencement of a case under this title after recognition of a
foreign main proceeding
`After recognition of a foreign main proceeding, a case under another
chapter of this title may be commenced only if the debtor has assets in the
United States. The effects of such case shall be restricted to the assets of
the debtor that are within the territorial jurisdiction of the United States
and, to the extent necessary to implement cooperation and coordination under
sections 625, 626, and 627, to other assets of the debtor that are within the
jurisdiction of the court under sections 541(a) and 1334(e) of title 28, to
the extent that such other assets are not subject to the jurisdiction and
control of a foreign proceeding that has been recognized under this
chapter.
`Sec. 629. Coordination of a case under this title and a foreign
proceeding
`In any case in which a foreign proceeding and a case under another
chapter of this title are taking place concurrently regarding the same debtor,
the court shall seek cooperation and coordination under sections 625, 626, and
627, and the following shall apply:
`(1) If the case in the United States is taking place at the time the
petition for recognition of the foreign proceeding is filed--
`(A) any relief granted under section 619 or 621 shall be consistent
with the relief granted in the case in the United States; and
`(B) even if the foreign proceeding is recognized as a foreign main
proceeding, section 620 does not apply.
`(2) If a case in the United States under this title commences after
recognition, or after the filing of the petition for recognition, of the
foreign proceeding--
`(A) any relief in effect under section 619 or 621 shall be reviewed
by the court and shall be modified or terminated if inconsistent with the
case in the United States; and
`(B) if the foreign proceeding is a foreign main proceeding, the stay
and suspension referred to in section 620(a) shall be modified or
terminated if inconsistent with the relief granted in the case in the
United States.
`(3) In granting, extending, or modifying relief granted to a
representative of a foreign nonmain proceeding, the court shall be satisfied
that the relief relates to assets that, under the law of the United States,
should be administered in the foreign nonmain proceeding or concerns
information required in that proceeding.
`(4) In achieving cooperation and coordination under sections 628 and
629, the court may grant any of the relief authorized under section
305.
`Sec. 630. Coordination of more than 1 foreign proceeding
`In matters referred to in section 601, with respect to more than 1
foreign proceeding regarding the debtor, the court shall seek cooperation and
coordination under sections 625, 626, and 627, and the following shall
apply:
`(1) Any relief granted under section 619 or 621 to a representative of
a foreign nonmain proceeding after recognition of a foreign main proceeding
shall be consistent with the foreign main proceeding.
`(2) If a foreign main proceeding is recognized after recognition, or
after the filing of a petition for recognition, of a foreign nonmain
proceeding, any relief in effect under section 619 or 621 shall be reviewed
by the court and shall be modified or terminated if inconsistent with the
foreign main proceeding.
`(3) If, after recognition of a foreign nonmain proceeding, another
foreign nonmain proceeding is recognized, the court shall grant, modify, or
terminate relief for the purpose of facilitating coordination of the
proceedings.
`Sec. 631. Presumption of insolvency based on recognition of a foreign main
proceeding
`In the absence of evidence to the contrary, recognition of a foreign main
proceeding is for the purpose of commencing a proceeding under section 303,
proof that the debtor is generally not paying its debts as such debts become
due.
`Sec. 632. Rule of payment in concurrent proceedings
`Without prejudice to secured claims or rights in rem, a creditor who has
received payment with respect to its claim in a foreign proceeding pursuant to
a law relating to insolvency may not receive a payment for the same claim in a
case under any other chapter of this title regarding the debtor, so long as
the payment to other creditors of the same class is proportionately less than
the payment the creditor has already received.'.
(b) CLERICAL AMENDMENT- The table of chapters for title 11, United States
Code, is amended by inserting after the item relating to chapter 5 the
following:
601'.
SEC. 502. AMENDMENTS TO OTHER CHAPTERS IN TITLE 11, UNITED STATES CODE.
(a) APPLICABILITY OF CHAPTERS- Section 103 of title 11, United States
Code, is amended--
(1) in subsection (a), by inserting before the period the following: `,
and this chapter, sections 307, 304, 555 through 557, 559, and 560 apply in
a case under chapter 6'; and
(2) by adding at the end the following:
`(j) Chapter 6 applies only in a case under such chapter, except that
section 605 applies to trustees and to any other entity, including an
examiner, designated by the court under chapter 7, 11, or 12, to debtors in
possession under chapter 11 or 12, and to debtors under chapters 9 and 13 who
are authorized to act under section 605.'.
(b) DEFINITIONS- Paragraphs (23) and (24) of section 101 of title 11,
United States Code, are amended to read as follows:
`(23) `foreign proceeding' means a collective judicial or administrative
proceeding in a foreign state, including an interim proceeding, pursuant to
a law relating to insolvency in which proceeding the assets and affairs of
the debtor are subject to control or supervision by a foreign court, for the
purpose of reorganization or liquidation;
`(24) `foreign representative' means a person or body, including a
person or body appointed on an interim basis, authorized in a foreign
proceeding to administer the reorganization or the liquidation of the
debtor's assets or affairs or to act as a representative of the foreign
proceeding;'.
(c) AMENDMENTS TO TITLE 28, UNITED STATES CODE-
(1) PROCEDURES- Section 157(b)(2) of title 28, United States Code, is
amended--
(A) in subparagraph (N), by striking `and' at the end;
(B) in subparagraph (O), by striking the period at the end and
inserting `; and'; and
(C) by adding at the end the following:
`(P) recognition of foreign proceedings and other matters under chapter
6 of title 11.'.
(2) BANKRUPTCY CASES AND PROCEEDINGS- Section 1334(c)(1) of title 28,
United States Code, is amended by striking `Nothing in' and inserting
`Except with respect to a case under chapter 6 of title 11, nothing
in'.
(3) DUTIES OF TRUSTEES- Section 586(a)(3) of title 28, United States
Code, is amended by inserting `6,' after `chapter'.
TITLE VI--MISCELLANEOUS
SEC. 601. EXECUTORY CONTRACTS AND UNEXPIRED LEASES.
Section 365(d) of title 11, United States Code, is amended by striking
paragraph (4) and inserting the following:
`(4)(A) Subject to subparagraph (B), in any case under any chapter of this
title, an unexpired lease of nonresidential real property under which the
debtor is the lessee shall be deemed rejected and the trustee shall
immediately surrender that nonresidential real property to the lessor if the
trustee does not assume or reject the unexpired lease by the earlier of--
`(i) the date that is 120 days after the date of the order for relief;
or
`(ii) the date of the entry of an order confirming a plan.
`(B) The court may extend the period determined under subparagraph (A)
only upon a motion of the lessor.'.
SEC. 602. EXPEDITED APPEALS OF BANKRUPTCY CASES TO COURTS OF APPEALS.
(a) IN GENERAL- Section 158 of title 28, United States Code, is
amended--
(1) by redesignating subsection (d) as subsection (e);
(2) by inserting after subsection (c) the following:
`(d)(1) Any final judgment, decision, order, or decree of a bankruptcy
judge entered for a case in accordance with section 157 may be appealed by any
party in such case to the appropriate court of appeals if--
`(A) an appeal from such judgment, decision, order, or decree is first
filed with the appropriate district court of the United States; and
`(B) the decision on the appeal described under subparagraph (A) is not
filed by a district court judge within 30 days after the date such appeal is
filed with the district court.
`(2) On the date that an appeal is filed with a court of appeals under
paragraph (1), the chief judge for such court of appeals shall issue an order
to the clerk for the district court from which the appeal is filed. Such order
shall direct the clerk to enter the final judgment, decision, order, or decree
of the bankruptcy judge as the final judgment, decision, order, or decree of
the district court.'; and
(3) in subsection (e), (as redesignated by paragraph (1) of this
section) by striking `subsections (a) and (b)' and inserting `subsections
(a), (b), and (d)'.
(b) TECHNICAL AND CONFORMING AMENDMENTS-
(1) Section 305(c) of title 11, United States Code, is amended by
striking `section 158(d)' and inserting `section 158(e)'.
(2) Section 1334(d) of title 28, United States Code, is amended by
striking `section 158(d)' and inserting `section 158(e)'.
(3) Section 1452(b) of title 28, United States Code, is amended by
striking `section 158(d)' and inserting `section 158(e)'.
SEC. 603. CREDITORS AND EQUITY SECURITY HOLDERS COMMITTEES.
Section 1102(a)(2) of title 11, United States Code, is amended by
inserting before the first sentence the following: `On its own motion or on
request of a party in interest, and after notice and hearing, the court may
order a change in the membership of a committee appointed under this
subsection, if the court determines that the change is necessary to ensure
adequate representation of creditors or equity security holders.'.
SEC. 604. REPEAL OF SUNSET PROVISION.
Section 302 of the Bankruptcy Judges, United States Trustees, and Family
Farmer Bankruptcy Act of 1986 (28 U.S.C. 581 note) is amended by striking
subsection (f).
SEC. 605. CASES ANCILLARY TO FOREIGN PROCEEDINGS.
Section 304 of title 11, United States Code, as amended by section 410 of
this Act, is amended by adding at the end the following:
`(e)(1) In this subsection--
`(A) the term `domestic insurance company' means a domestic insurance
company, as that term is used in section 109(b)(2);
`(B) the term `foreign insurance company' means a foreign insurance
company, as that term is used in section 109(b)(3);
`(C) the term `United States claimant' means a beneficiary of any
deposit referred to in paragraph (2)(A) or any multibeneficiary trust
referred to in subparagraph (B) or (C) of paragraph (2);
`(D) the term `United States creditor' means, with respect to a foreign
insurance company--
`(i) a United States claimant; or
`(ii) any business entity that operates in the United States and that
is a creditor; and
`(E) the term `United States policyholder' means a holder of an
insurance policy issued in the United States.
`(2) Notwithstanding subsections (b) and (c), the court may not grant
relief under subsection (b) to a foreign insurance company that is not engaged
in the business of insurance or reinsurance in the United States with respect
to any claim made by a United States creditor against--
`(A) a deposit required by an applicable State insurance law;
`(B) a multibeneficiary trust required by an applicable State insurance
law to protect United States policyholders or claimants against a foreign
insurance company; or
`(C) a multibeneficiary trust authorized under an applicable State
insurance law to allow a domestic insurance company that cedes reinsurance
to the debtor to reflect the reinsurance as an asset or deduction from
liability in the ceding insurer's financial statements.'.
SEC. 606. LIMITATION.
Section 546(c)(1)(B) of title 11, United States Code, is amended by
striking `20' and inserting `45'.
SEC. 607. AMENDMENT TO SECTION 546 OF TITLE 11, UNITED STATES CODE.
Section 546 of title 11, United States Code, as amended by section 401 of
this Act, is amended by adding at the end the following:
`(i) Notwithstanding paragraphs (2) and (3) of section 545, the trustee
may not avoid a warehouseman's lien for storage, transportation, or other
costs incidental to the storage and handling of goods, as provided by an
applicable State law that is similar to section 7-209 of the Uniform
Commercial Code.'.
SEC. 608. AMENDMENT TO SECTION 330(a) OF TITLE 11, UNITED STATES CODE.
Section 330(a)(3)(A) of title 11, United States Code, is amended--
(1) by inserting `In determining the amount of reasonable compensation
to be awarded a trustee, the court shall treat such compensation as a
commission based on the results achieved.' after `(3)(A)'; and
(2) by inserting `to an examiner, chapter 11 trustee, or professional
person' after `awarded'.
TITLE VII--TECHNICAL CORRECTIONS
SEC. 701. ADJUSTMENT OF DOLLAR AMOUNTS.
Section 104 of title 11, United States Code, is amended by inserting
`522(f)(3), 707(b)(5),' after `522(d),' each place it appears.
SEC. 702. EXTENSION OF TIME.
Section 108(c)(2) of title 11, United States Code, is amended by striking
`922' and all that follows through `or', and inserting `922, 1201, or'.
SEC. 703. WHO MAY BE A DEBTOR.
Section 109(b)(2) of title 11, United States Code, is amended by striking
`subsection (c) or (d) of'.
SEC. 704. PENALTY FOR PERSONS WHO NEGLIGENTLY OR FRAUDULENTLY PREPARE
BANKRUPTCY PETITIONS.
Section 110(j)(3) of title 11, United States Code, is amended by striking
`attorney's' and inserting `attorneys'.
SEC. 705. LIMITATION ON COMPENSATION OF PROFESSIONAL PERSONS.
Section 328(a) of title 11, United States Code, is amended by inserting
`on a fixed or percentage fee basis,' after `hourly basis,'.
SEC. 706. SPECIAL TAX PROVISIONS.
Section 346(g)(1)(C) of title 11, United States Code, is amended by
striking `, except' and all that follows through `1986'.
SEC. 707. EFFECT OF CONVERSION.
Section 348(f)(2) of title 11, United States Code, is amended by inserting
`of the estate' after `property' the first place it appears.
SEC. 708. AUTOMATIC STAY.
Section 362(b) of title 11, United States Code, as amended by section 401
of this Act, is amended--
(1) in paragraph (20), by striking `or' at the end;
(2) in paragraph (21), by striking the period at the end and inserting a
semicolon; and
(3) by inserting after paragraph (21) the following:
`(22) under subsection (a) of this section of any transfer that is not
avoidable under section 544 and that is not avoidable under section
549;
`(23) under subsection (a)(3) of this section, of the continuation of
any eviction, unlawful detainer action, or similar proceeding by a lessor
against a debtor involving residential real property in which the debtor
resides as a tenant under a rental agreement and the debtor has not paid
rent to the lessor under the terms of the lease agreement or applicable
State law after the commencement and during the course of the case;
`(24) under subsection (a)(3) of this section, of the commencement or
continuation of any eviction, unlawful detainer action, or similar
proceeding by a lessor against a debtor involving residential real property
in which the debtor resides as a tenant under a rental agreement that has
terminated pursuant to the lease agreement or applicable State law;
`(25) under subsection (a)(3), of any eviction, unlawful detainer
action, or similar proceeding, if the debtor has previously filed within the
preceding year and failed to pay post-petition rent during the course of
that case; or
`(26) under subsection (a)(3), of eviction actions based on endangerment
to property or person or the use of illegal drugs.'.
SEC. 709. ALLOWANCE OF ADMINISTRATIVE EXPENSES.
Section 503(b)(4) of title 11, United States Code, is amended by inserting
`subparagraph (A), (B), (C), (D), or (E) of' before `paragraph (3)'.
SEC. 710. PRIORITIES.
Section 507(a) of title 11, United States Code, as amended by section 323
of this Act, is amended--
(1) in paragraph (3)(B), by striking the semicolon at the end and
inserting a period; and
(2) in paragraph (7), by inserting `unsecured' after `allowed'.
SEC. 711. EXEMPTIONS.
Section 522 of title 11, United States Code, as amended by section 320 of
this Act, is amended--
(1) in subsection (f)(1)(A)(ii)(II)--
(A) by striking `includes a liability designated as' and inserting `is
for a liability that is designated as, and is actually in the nature of,';
and
(B) by striking `, unless' and all that follows through `support';
and
(2) in subsection (g)(2), by striking `subsection (f)(2)' and inserting
`subsection (f)(1)(B)'.
SEC. 712. EXCEPTIONS TO DISCHARGE.
Section 523 of title 11, United States Code, as amended by section 315 of
this Act, is amended--
(1) in subsection (a)(3), by striking `or (6)' each place it appears and
inserting `(6), or (15)';
(2) as amended by section 304(e) of Public Law 103-394 (108 Stat. 4133),
in paragraph (15), by transferring such paragraph so as to insert it after
paragraph (14A) of subsection (a);
(3) in subsection (a)(9), by inserting `, watercraft, or aircraft' after
`motor vehicle';
(4) in subsection (a)(15), as so redesignated by paragraph (2) of this
subsection, by inserting `to a spouse, former spouse, or child of the debtor
and' after `(15)';
(5) in subsection (a)(17)--
(A) by striking `by a court' and inserting `on a prisoner by any
court';
(B) by striking `section 1915 (b) or (f)' and inserting `subsection
(b) or (f)(2) of section 1915'; and
(C) by inserting `(or a similar non-Federal law)' after `title 28'
each place it appears; and
(6) in subsection (e), by striking `a insured' and inserting `an
insured'.
SEC. 713. EFFECT OF DISCHARGE.
Section 524(a)(3) of title 11, United States Code, is amended by striking
`section 523' and all that follows through `or that' and inserting `section
523, 1228(a)(1), or 1328(a)(1) of this title, or that'.
SEC. 714. PROTECTION AGAINST DISCRIMINATORY TREATMENT.
Section 525(c) of title 11, United States Code, is amended--
(1) in paragraph (1), by inserting `student' before `grant' the second
place it appears; and
(2) in paragraph (2), by striking `the program operated under part B, D,
or E of' and inserting `any program operated under'.
SEC. 715. PROPERTY OF THE ESTATE.
Section 541(b)(4)(B)(ii) of title 11, United States Code, is amended by
inserting `365 or' before `542'.
SEC. 716. PREFERENCES.
Section 547 of title 11, United States Code, is amended--
(1) in subsection (b), by striking `subsection (c)' and inserting
`subsections (c) and (h)'; and
(2) by adding at the end the following:
`(h) If the trustee avoids under subsection (b) a security interest given
between 90 days and 1 year before the date of the filing of the petition, by
the debtor to an entity that is not an insider for the benefit of a creditor
that is an insider, such security interest shall be considered to be avoided
under this section only with respect to the creditor that is an insider.'.
SEC. 717. POSTPETITION TRANSACTIONS.
Section 549(c) of title 11, United States Code, is amended--
(1) by inserting `an interest in' after `transfer of';
(2) by striking `such property' and inserting `such real property';
and
(3) by striking `the interest' and inserting `such interest'.
SEC. 718. TECHNICAL AMENDMENT.
Section 552(b)(1) of title 11, United States Code, is amended by striking
`product' each place it appears and inserting `products'.
SEC. 719. DISPOSITION OF PROPERTY OF THE ESTATE.
Section 726(b) of title 11, United States Code, is amended by striking
`1009,'.
SEC. 720. GENERAL PROVISIONS.
Section 901(a) of title 11, United States Code, as amended by section 401
of this Act, is amended by inserting `1123(d),' after `1123(b),'.
SEC. 721. APPOINTMENT OF ELECTED TRUSTEE.
Section 1104(b) of title 11, United States Code, is amended--
(1) by inserting `(1)' after `(b)'; and
(2) by adding at the end the following:
`(2)(A) If an eligible, disinterested trustee is elected at a meeting of
creditors under paragraph (1), the United States trustee shall file a report
certifying that election. Upon the filing of a report under the preceding
sentence--
`(i) the trustee elected under paragraph (1) shall be considered to have
been selected and appointed for purposes of this section; and
`(ii) the service of any trustee appointed under subsection (d) shall
terminate.
`(B) In the case of any dispute arising out of an election under
subparagraph (A), the court shall resolve the dispute.'.
SEC. 722. ABANDONMENT OF RAILROAD LINE.
Section 1170(e)(1) of title 11, United States Code, is amended by striking
`section 11347' and inserting `section 11326(a)'.
SEC. 723. CONTENTS OF PLAN.
Section 1172(c)(1) of title 11, United States Code, is amended by striking
`section 11347' and inserting `section 11326(a)'.
SEC. 724. DISCHARGE UNDER CHAPTER 12.
Subsections (a) and (c) of section 1228 of title 11, United States Code,
are amended by striking `1222(b)(10)' each place it appears and inserting
`1222(b)(9)'.
SEC. 725. EXTENSIONS.
Section 302(d)(3) of the Bankruptcy, Judges, United States Trustees, and
Family Farmer Bankruptcy Act of 1986 (28 U.S.C. 581 note) is amended--
(1) in subparagraph (A), in the matter following clause (ii), by
striking `or October 1, 2002, whichever occurs first'; and
(2) in subparagraph (F)--
(i) in subclause (II), by striking `or October 1, 2002, whichever
occurs first'; and
(ii) in the matter following subclause (II), by striking `October 1,
2003, or'; and
(B) in clause (ii), in the matter following subclause (II)--
(i) by striking `before October 1, 2003, or'; and
(ii) by striking `, whichever occurs first'.
SEC. 726. BANKRUPTCY CASES AND PROCEEDINGS.
Section 1334(d) of title 28, United States Code, is amended--
(1) by striking `made under this subsection' and inserting `made under
subsection (c)'; and
(2) by striking `This subsection' and inserting `Subsection (c) and this
subsection'.
SEC. 727. KNOWING DISREGARD OF BANKRUPTCY LAW OR RULE.
Section 156(a) of title 18, United States Code, is amended--
(1) in the first undesignated paragraph--
(A) by inserting `(1) the term' before `bankruptcy'; and
(B) by striking the period at the end and inserting `; and';
and
(2) in the second undesignated paragraph--
(A) by inserting `(2) the term' before `document'; and
(B) by striking `this title' and inserting `title 11'.
SEC. 728. ROLLING STOCK EQUIPMENT.
(a) IN GENERAL- Section 1168 of title 11, United States Code, is amended
to read as follows:
`Sec. 1168. Rolling stock equipment
`(a)(1) The right of a secured party with a security interest in or of a
lessor or conditional vendor of equipment described in paragraph (2) to take
possession of such equipment in compliance with an equipment security
agreement, lease, or conditional sale contract, and to enforce any of its
other rights or remedies under such security agreement, lease, or conditional
sale contract, to sell, lease, or otherwise retain or dispose of such
equipment, is not limited or otherwise affected by any other provision of this
title or by any power of the court, except that the right to take possession
and enforce those other rights and remedies shall be subject to section 362,
if--
`(A) before the date that is 60 days after the date of commencement of a
case under this chapter, the trustee, subject to the court's approval,
agrees to perform all obligations of the debtor under such security
agreement, lease, or conditional sale contract; and
`(B) any default, other than a default of a kind described in section
365(b)(2), under such security agreement, lease, or conditional sale
contract that--
`(i) occurs before the date of commencement of the case and is an
event of default therewith is cured before the expiration of such 60-day
period;
`(ii) occurs or becomes an event of default after the date of
commencement of the case and before the expiration of such 60-day period
is cured before the later of--
`(I) the date that is 30 days after the date of the default or event
of the default; or
`(II) the expiration of such 60-day period; and
`(iii) occurs on or after the expiration of such 60-day period is
cured in accordance with the terms of such security agreement, lease, or
conditional sale contract, if cure is permitted under that agreement,
lease, or conditional sale contract.
`(2) The equipment described in this paragraph--
`(A) is rolling stock equipment or accessories used on rolling stock
equipment, including superstructures or racks, that is subject to a security
interest granted by, leased to, or conditionally sold to a debtor; and
`(B) includes all records and documents relating to such equipment that
are required, under the terms of the security agreement, lease, or
conditional sale contract, to be surrendered or returned by the debtor in
connection with the surrender or return of such equipment.
`(3) Paragraph (1) applies to a secured party, lessor, or conditional
vendor acting in its own behalf or acting as trustee or otherwise in behalf of
another party.
`(b) The trustee and the secured party, lessor, or conditional vendor
whose right to take possession is protected under subsection (a) may agree,
subject to the court's approval, to extend the 60-day period specified in
subsection (a)(1).
`(c)(1) In any case under this chapter, the trustee shall immediately
surrender and return to a secured party, lessor, or conditional vendor,
described in subsection (a)(1), equipment described in subsection (a)(2), if
at any time after the date of commencement of the case under this chapter such
secured party, lessor, or conditional vendor is entitled under subsection
(a)(1) to take possession of such equipment and makes a written demand for
such possession of the trustee.
`(2) At such time as the trustee is required under paragraph (1) to
surrender and return equipment described in subsection (a)(2), any lease of
such equipment, and any security agreement or conditional sale contract
relating to such equipment, if such security agreement or conditional sale
contract is an executory contract, shall be deemed rejected.
`(d) With respect to equipment first placed in service on or before
October 22, 1994, for purposes of this section--
`(1) the term `lease' includes any written agreement with respect to
which the lessor and the debtor, as lessee, have expressed in the agreement
or in a substantially contemporaneous writing that the agreement is to be
treated as a lease for Federal income tax purposes; and
`(2) the term `security interest' means a purchase-money equipment
security interest.
`(e) With respect to equipment first placed in service after October 22,
1994, for purposes of this section, the term `rolling stock equipment'
includes rolling stock equipment that is substantially rebuilt and accessories
used on such equipment.'.
(b) AIRCRAFT EQUIPMENT AND VESSELS- Section 1110 of title 11, United
States Code, is amended to read as follows:
`Sec. 1110. Aircraft equipment and vessels
`(a)(1) Except as provided in paragraph (2) and subject to subsection (b),
the right of a secured party with a security interest in equipment described
in paragraph (3), or of a lessor or conditional vendor of such equipment, to
take possession of such equipment in compliance with a security agreement,
lease, or conditional sale contract, and to enforce any of its other rights or
remedies, under such security agreement, lease, or conditional sale contract,
to sell, lease, or otherwise retain or dispose of such equipment, is not
limited or otherwise affected by any other provision of this title or by any
power of the court.
`(2) The right to take possession and to enforce the other rights and
remedies described in paragraph (1) shall be subject to section 362 if--
`(A) before the date that is 60 days after the date of the order for
relief under this chapter, the trustee, subject to the approval of the
court, agrees to perform all obligations of the debtor under such security
agreement, lease, or conditional sale contract; and
`(B) any default, other than a default of a kind specified in section
365(b)(2), under such security agreement, lease, or conditional sale
contract that occurs--
`(i) before the date of the order is cured before the expiration of
such 60-day period;
`(ii) after the date of the order and before the expiration of such
60-day period is cured before the later of--
`(I) the date that is 30 days after the date of the default;
or
`(II) the expiration of such 60-day period; and
`(iii) on or after the expiration of such 60-day period is cured in
compliance with the terms of such security agreement, lease, or
conditional sale contract, if a cure is permitted under that agreement,
lease, or contract.
`(3) The equipment described in this paragraph--
`(i) an aircraft, aircraft engine, propeller, appliance, or spare part
(as defined in section 40102 of title 49) that is subject to a security
interest granted by, leased to, or conditionally sold to a debtor that, at
the time such transaction is entered into, holds an air carrier operating
certificate issued under chapter 447 of title 49 for aircraft capable of
carrying 10 or more individuals or 6,000 pounds or more of cargo;
or
`(ii) a documented vessel (as defined in section 30101(1) of title 46)
that is subject to a security interest granted by, leased to, or
conditionally sold to a debtor that is a water carrier that, at the time
such transaction is entered into, holds a certificate of public
convenience and necessity or permit issued by the Department of
Transportation; and
`(B) includes all records and documents relating to such equipment that
are required, under the terms of the security agreement, lease, or
conditional sale contract, to be surrendered or returned by the debtor in
connection with the surrender or return of such equipment.
`(4) Paragraph (1) applies to a secured party, lessor, or conditional
vendor acting in its own behalf or acting as trustee or otherwise in behalf of
another party.
`(b) The trustee and the secured party, lessor, or conditional vendor
whose right to take possession is protected under subsection (a) may agree,
subject to the approval of the court, to extend the 60-day period specified in
subsection (a)(1).
`(c)(1) In any case under this chapter, the trustee shall immediately
surrender and return to a secured party, lessor, or conditional vendor,
described in subsection (a)(1), equipment described in subsection (a)(3), if
at any time after the date of the order for relief under this chapter such
secured party, lessor, or conditional vendor is entitled under subsection
(a)(1) to take possession of such equipment and makes a written demand for
such possession to the trustee.
`(2) At such time as the trustee is required under paragraph (1) to
surrender and return equipment described in subsection (a)(3), any lease of
such equipment, and any security agreement or conditional sale contract
relating to such equipment, if such security agreement or conditional sale
contract is an executory contract, shall be deemed rejected.
`(d) With respect to equipment first placed in service on or before
October 22, 1994, for purposes of this section--
`(1) the term `lease' includes any written agreement with respect to
which the lessor and the debtor, as lessee, have expressed in the agreement
or in a substantially contemporaneous writing that the agreement is to be
treated as a lease for Federal income tax purposes; and
`(2) the term `security interest' means a purchase-money equipment
security interest.'.
SEC. 729. CURBING ABUSIVE FILINGS.
(a) IN GENERAL- Section 362(d) of title 11, United States Code, is
amended--
(1) in paragraph (2), by striking `or' at the end;
(2) in paragraph (3), by striking the period at the end and inserting `;
or'; and
(3) by adding at the end the following:
`(4) with respect to a stay of an act against real property under
subsection (a), by a creditor whose claim is secured by an interest in such
real estate, if the court finds that the filing of the bankruptcy petition
was part of a scheme to delay, hinder, and defraud creditors that involved
either--
`(A) transfer of all or part ownership of, or other interest in, the
real property without the consent of the secured creditor or court
approval; or
`(B) multiple bankruptcy filings affecting the real property.
If recorded in compliance with applicable State laws governing notices of
interests or liens in real property, an order entered pursuant to this
subsection shall be binding in any other case under this title purporting to
affect the real property filed not later than 2 years after that recording,
except that a debtor in a subsequent case may move for relief from such order
based upon changed circumstances or for good cause shown, after notice and a
hearing.'.
(b) AUTOMATIC STAY- Section 362(b) of title 11, United States Code, as
amended by section 708 of this Act, is amended--
(1) in paragraph (25), by striking `or' at the end;
(2) in paragraph (26), by striking the period at the end and inserting a
semicolon; and
(3) by inserting after paragraph (26) the following:
`(27) under subsection (a) of this section, of any act to enforce any
lien against or security interest in real property following the entry of an
order under section 362(d)(4) as to that property in any prior bankruptcy
case for a period of 2 years after entry of such an order, except that, the
debtor in a subsequent case of the debtor, may move the court for relief
from such order based upon changed circumstances or for other good cause
shown, after notice and a hearing; or
`(28) under subsection (a) of this section, of any act to enforce any
lien against or security interest in real property--
`(A) if the debtor is ineligible under section 109(g) to be a debtor
in a bankruptcy case; or
`(B) if the bankruptcy case was filed in violation of a bankruptcy
court order in a prior bankruptcy case prohibiting the debtor from being a
debtor in another bankruptcy case.'.
SEC. 730. STUDY OF OPERATION OF TITLE 11 OF THE UNITED STATES CODE WITH
RESPECT TO SMALL BUSINESSES.
Not later than 2 years after the date of enactment of this Act, the
Administrator of the Small Business Administration, in consultation with the
Attorney General, the Director of the Administrative Office of United States
Trustees, and the Director of the Administrative Office of the United States
Courts, shall--
(1) conduct a study to determine--
(A) the internal and external factors that cause small businesses,
especially sole proprietorships, to become debtors in cases under title 11
of the United States Code and that cause certain small businesses to
successfully complete cases under chapter 11 of such title; and
(B) how Federal laws relating to bankruptcy may be made more effective
and efficient in assisting small businesses to remain viable; and
(2) submit to the President pro tempore of the Senate and the Speaker of
the House of Representatives a report summarizing that study.
SEC. 731. TRANSFERS MADE BY NONPROFIT CHARITABLE CORPORATIONS.
(a) SALE OF PROPERTY OF ESTATE- Section 363(d) of title 11, United States
Code, is amended--
(1) by striking `only' and all that follows through the end of the
subsection and inserting `only--
`(1) in accordance with applicable nonbankruptcy law that governs the
transfer of property by a corporation or trust that is not a moneyed,
business, or commercial corporation or trust; and
`(2) to the extent not inconsistent with any relief granted under
subsection (c), (d), (e), or (f) of section 362.'.
(b) CONFIRMATION OF PLAN FOR REORGANIZATION- Section 1129(a) of title 11,
United States Code, is amended by adding at the end the following:
`(14) All transfers of property of the plan shall be made in accordance
with any applicable provisions of nonbankruptcy law that govern the transfer
of property by a corporation or trust that is not a moneyed, business, or
commercial corporation or trust.'.
(c) TRANSFER OF PROPERTY- Section 541 of title 11, United States Code, as
amended by section 403 of this Act, is amended by adding at the end the
following:
`(e) Notwithstanding any other provision of this title, property that is
held by a debtor that is a corporation described in section 501(c)(3) of the
Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such
Code may be transferred to an entity that is not such a corporation, but only
under the same conditions as would apply if the debtor had not filed a case
under this title.'.
(d) APPLICABILITY- The amendments made by this section shall apply to a
case pending under title 11, United States Code, on the date of enactment of
this Act, except that the court shall not confirm a plan under chapter 11 of
this title without considering whether this section would substantially affect
the rights of a party in interest who first acquired rights with respect to
the debtor after the date of the petition. The parties who may appear and be
heard in a proceeding under this section include the attorney general of the
State in which the debtor is incorporated, was formed, or does business.
SEC. 732. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) EFFECTIVE DATE- Except as provided in subsection (b), this title and
the amendments made by this title shall take effect on the date of enactment
of this Act.
(b) APPLICATION OF AMENDMENTS- The amendments made by this title shall
apply only with respect to cases commenced under title 11, United States Code,
on or after the date of enactment of this Act.
END